The Evolution of the Lottery

The drawing of lots to determine ownership or other rights is recorded in dozens of ancient documents, including the Bible. In the 1612 lottery established by King James I of England, the first permanent British settlement in America was funded. The lottery has been used since that time to raise money for towns, wars, colleges, and public-works projects. Many states now operate lotteries.

Most people know that the odds of winning a prize in the lottery are very long. They also know that their ticket purchases do not improve their odds of winning, but they buy tickets anyway. Why? Because there is value in the hope, however irrational and mathematically impossible it may be.

Lottery revenues typically expand dramatically at first, then level off or even decline. To maintain or increase revenues, state lotteries have introduced new games and techniques such as instant games (like scratch-off tickets) and merchandising partnerships with brands such as Coca-Cola and Harley-Davidson.

The result is that state lotteries have become highly specialized, with extensive and loyal specific constituencies such as convenience store operators; lottery suppliers (heavy contributions to state political campaigns are frequently reported); teachers (in states where the proceeds from lotteries are earmarked for education); state legislators (who quickly grow accustomed to the extra revenue); and players (who themselves become devoted to the games). The state governments operating lotteries have granted themselves monopoly status, preventing private competition. Consequently, a lottery is a classic case of a piecemeal public policy that evolves independently of the state’s overall fiscal health.