How the Lottery Works

The lottery is a classic case of public policy that develops piecemeal and incrementally, with very little overall vision. States begin their lotteries by legitimizing a state-sponsored gambling monopoly; establish a government agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a slice of the profits); start with a modest number of relatively simple games; and, under pressure from continued demands for revenue, gradually expand in size and complexity.

The resulting lottery system becomes an extension of the state’s welfare functions, providing the poor with some income, and socially disadvantaged groups with money to spend on their favorite vices, even though those vices impose substantial costs on society in their aggregate. The lottery is often viewed as the “last resort” of many players, who realize that their odds of winning are very long, but nevertheless feel that they must play for that sliver of hope that the prize will someday be theirs.

Despite the long odds, most people continue to participate in the lottery, demonstrating clear-eyed gambling behavior. Men tend to play more than women; blacks and Hispanics play more than whites; young adults and those with formal education play less than middle-aged and older populations; and, for all these categories, the percentage of their income spent on lottery tickets rises with income. Moreover, despite the overwhelming evidence that most players are losing, the number of those who report having won the lottery has increased dramatically in recent years.