What is a Lottery?

A lottery is a game in which numbers are drawn to determine winners of prizes, such as cash or goods. The word is believed to be derived from a combination of Middle Dutch lot and Old English loot, from a root meaning “to cast or draw lots.” The early colonial use of the lottery helped fund the Virginia Company and the construction of buildings at Harvard and Yale. Lottery prizes also included land and livestock. The system of drawing numbers for the lottery is often criticized as a form of hidden tax, and it is important to understand how the prize money is allocated before you buy a ticket.

Most states run lotteries. They typically establish a state agency or public corporation to run the lottery (rather than licensing a private firm in return for a share of the profits); start operations with a modest number of relatively simple games; and, driven by constant pressure to increase revenues, progressively expand their game offerings and complexity. Some have even created their own version of Powerball and Mega Millions.

The lottery dangles the promise of instant riches in an age of inequality and limited social mobility. Almost everyone who has played the lottery has seen billboards advertising large jackpots. The odds of winning, however, are incredibly slim—and a win would quickly deplete one’s emergency funds and send the winner into debt.

Lottery winners also face the prospect of hefty taxes on their windfall. The skepticism that people have about the lottery is compounded by real-life stories of tragedy and madness that follow winning big prizes. There are the gruesome tales of Abraham Shakespeare, who died after winning $31 million in 2006; Jeffrey Dampier, who was kidnapped and murdered by his sister-in-law and her boyfriend after scooping a comparatively paltry $20 million; and Urooj Khan, who poisoned himself with cyanide after taking home a $1 million prize in a 2003 lottery.

While the large jackpots entice many to buy tickets, research suggests that the overwhelmingly dominant reason is that lotteries appeal to our propensity for risk and uncertainty. The more we want to believe that the future will be better than the present, and the more we want to feel good about ourselves, the more likely we are to engage in risky behavior. This is particularly true in an environment where a sense of personal failure and insecurity can lead us to seek out thrills, and to ignore the dangers that accompany them. As the financial crisis continues to unfold, this desire for excitement may well become even more powerful. It is not surprising, then, that so many Americans are tempted by the lottery.

Posted in: Gambling