The Problem With the Lottery


The lottery is a form of gambling in which numbers are drawn to win prizes. A prize may be cash or goods. The number of winners depends on the number of tickets purchased. A lottery is usually regulated by state law. People often consider the lottery a fun activity, but it is considered to be addictive and can have a negative impact on health. People should be aware of the risks and should not gamble without thinking about the consequences.

In the seventeenth century, Europeans began experimenting with lotteries to raise money for everything from building the British Museum to rebuilding bridges. They were popular, and the Dutch State-owned Staatsloterij is the oldest still running lottery (1726). By the late nineteen sexies, however, the popularity of lotteries dipped, and it became clear that a substantial share of ticket purchasers were addicted.

The odds of winning the lottery were not that bad—to an individual with a low income, the expected utility from monetary and non-monetary benefits of playing might outweigh the disutility of a monetary loss. But to those who played regularly, the disutility of a monetary lose became greater the higher the stakes got: a three-million-dollar jackpot was much more tempting than one-in-three-hundred-thousand-dollar odds. Lotteries were being abused.

Cohen suggests that the problem began when America’s aversion to taxes—fueled by a growing sense of the impossibility of wealth accumulation, by soaring inflation and the costs of the Vietnam War, and by rising interest rates—clashed with a shortage in state funding. As federal funds dried up, states were forced to either increase taxes or cut services. The choice seemed to be unpalatable to most Americans.

A lottery, he argues, offers a painless alternative to raising taxes or cutting programs and services. And it seems to be working. As of this writing, twenty-four states offer a lottery and the sales of tickets are soaring.

But there are other problems with this picture. Although it is true that rich people buy fewer tickets than poor people, the difference in their purchasing patterns can be stark: Asset managers who make more than fifty thousand dollars per year spend, on average, about one percent of their income on lottery tickets; those who make less than thirty thousand dollars spend thirteen percent of their income. And even the wealthy do not always have a good time: The specter of financial ruin can be more debilitating than any monetary loss. Moreover, the dream of winning the lottery can undermine the long-standing national promise that hard work and education will enable people to be better off than their parents. The lottery may be fun for some, but it is also a symptom of a profound crisis in American life. If it persists, the lottery will have to be reformed, or replaced altogether. But it is not yet too late to change course.

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