What is the Lottery?


The lottery is a form of gambling in which numbers are drawn at random for prizes. Some governments outlaw lotteries, while others endorse them and regulate them. Typically, lotteries offer large cash prizes. Some also give away goods or services. The word lottery derives from the Dutch noun lot, meaning “fate” or “destiny.”

The purchase of lottery tickets cannot be accounted for by decision models based on expected value maximization, as the ticket costs more than the expected prize. Instead, the purchase of lottery tickets may be motivated by risk-seeking behavior or by a desire to experience a thrill or indulge in a fantasy.

State governments enacted lotteries in the immediate post-World War II period, when they believed that they could expand their social safety net without incurring especially onerous taxes on working and middle class families. By the 1960s that arrangement began to come apart, and states realized that they needed additional revenue sources.

But state officials still believe that lottery revenues are a relatively benign form of taxation, as compared to income taxes or sales taxes. That is an illusion, and it obscures the regressivity of lottery revenue.

People often talk about the benefits of the lottery as if they were specific and concrete, such as the money that it raises for state education or for children’s hospitals. But the message that the lottery is a good thing because it raises money for state programs obscures how much of a gamble it really is.