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How the Lottery Works

The casting of lots to make decisions and determine fates has a long record in human history, including several references in the Bible. But when it comes to the distribution of prize money for material gain, lottery games are comparatively modern. They were first introduced to the public in Bruges, Belgium, in 1466. They are now run by almost every state and many countries, with a total global turnover of nearly $70 billion per year. In the United States, more than 60 million people play the lottery each week and spend an average of $80 on tickets. That amounts to a lot of money, enough to pay for about half the cost of the national defense.

Unlike the games of chance offered in casinos, which require a substantial amount of time and effort to play and often offer low odds of winning, state-sponsored lotteries have the advantage of being accessible to the broadest possible audience, from convenience store customers to people who buy the top-of-the-line computers to manage their purchases. As a result, most of the money that is spent on lottery tickets comes from a relatively small group of regular players, who account for about 10 percent of all purchasers. As a result, the state’s bottom line depends heavily on these regular patrons.

While there is an inextricable human desire to gamble, much of the appeal of the lottery is that it promises instant riches. That’s especially true of the mega-sized jackpots that drive sales and attract the attention of news sites, TV broadcasters and newspapers.

The fact that the jackpots grow to seemingly unmanageable amounts reflects the way that modern lottery games are designed, and is a direct consequence of their commercialization. Running a lottery as a business with the primary goal of maximizing revenues requires enormous advertising spending to convince people that their money is being well spent. This promotion of gambling can have serious consequences, particularly for lower-income groups and problem gamblers.

The development of state lotteries has followed a fairly consistent pattern since New Hampshire pioneered the modern era in 1964. States legislate a monopoly; establish a state agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits); begin operations with a modest number of relatively simple games; and, as pressures to generate additional revenue increase, progressively expand the lottery’s scope and complexity. As a result, the lottery has become a classic example of public policy making by the piecemeal method, with little overall oversight or control. Consequently, state officials rarely take the general welfare into consideration when designing or implementing the lottery’s policies. In addition, the state’s financial support of the lottery creates a special interest group with its own agenda. The lobbying efforts of this group are reflected in the way that the lottery is run.