How the Lottery Industry Benefits State Governments


Lottery is an activity where numbers are drawn at random and prizes, such as cash or goods, are awarded. It’s an ancient pastime—Nero was a fan, and the casting of lots is mentioned in the Bible for everything from determining who gets to keep Jesus’ garments after his Crucifixion to deciding who wins the Roman Saturnalia games. It is also an industry with enormous profit potential, and it’s not just the players who benefit from its allure: State governments reap billions annually from lottery ticket sales.

The odds of winning a jackpot prize are incredibly low, so the only way to improve your chances is to buy more tickets. However, the cost of doing so can be prohibitive, especially for those with a minimum wage job. This is why the lottery is considered an addictive activity. It creates a false sense of hope that it’s possible to turn your small income into a large fortune. It’s the same psychological trick used by gambling casinos and even some tobacco and video-game manufacturers.

In the book “The Mathematics of Chance,” Harvard University statistics professor Mark Glickman explains that there are a number of tricks that people use to increase their odds of winning the lottery. These include selecting numbers that are not close together, avoiding numbers that have sentimental value like birthdays and wedding anniversaries, and buying Quick Picks. While these tips can help you win a smaller prize, they won’t make you rich. Instead, he recommends playing a larger game and dividing the money you spend on tickets with friends.

Cohen argues that the modern lottery’s rise was facilitated by a growing awareness of all the money to be made in gambling and a crisis in state finances. In the late twentieth century, she writes, the fervor for tax revolts accelerated, and states found themselves faced with the choice of raising taxes or cutting services—options that were highly unpopular with voters. Lottery advocates pointed to gambling’s success in other countries and argued that state governments would have the same luck if they legalized it.

In the end, though, state government is usually the bigger winner. Typically, a large percentage of lottery winnings go to commissions for lottery retailers and overhead costs for the system itself. Afterward, the remaining amount is divided among winners and used for various purposes, such as infrastructure projects and addiction prevention.