Lottery is a game of chance that involves selling or drawing lots to allocate prizes, whether money, goods, or services. Despite the fact that the chances of winning are extremely low, lottery participants continue to play in large numbers. The history of lotteries in the United States is instructive for the ways that government can influence behavior through a variety of methods, including those based on chance.
As early as the fourteenth century, the Dutch used lotteries to raise funds for town defenses and to support local charity. By the seventeenth century, public lotteries were common in England and the American colonies as a means to sell land or property more quickly than could be done through regular sales. The Continental Congress hoped to use lotteries to finance the Revolutionary War. Alexander Hamilton, who understood the essence of the lottery, argued that “Everybody… will be willing to hazard a trifling sum for the chance of considerable gain.”
In early America, lottery profits financed everything from public works projects to civil defense and churches. Some states earmarked a share of the proceeds for education. The lottery was a common source of revenue and, in many cases, a way to get around the opposition to taxation among devout Protestants.
Even after the enactment of state lotteries, however, the public remained divided over the ethics of funding public services through gambling. Critics came from across the political spectrum and from all walks of life, but they were largely Protestants who viewed government-sponsored gambling as immoral. They were also concerned that the profits did not go primarily to the neediest members of society.
The fact that the public has been able to find a solution to this dilemma, and that it is not as regressive as one might think, speaks to the strength of an inexplicable human impulse. Some people simply like to gamble, and there is nothing wrong with that. But there is much more to lottery marketing than the simple hedonistic desire to win, and the state lotteries understand that very well. They know that they must entice customers with high jackpots and low odds of winning in order to keep them coming back for more.
The savvy marketers of the modern-day lottery have come up with a strategy that is no different than that of tobacco companies or video-game manufacturers. They know that a certain percentage of the population is susceptible to addiction, and they use every trick in the book to keep those customers hooked. They advertise at convenience stores; they subsidize the advertising of their suppliers; they offer special prizes to those who buy multiple tickets; and they place their advertisements in areas where people are more likely to be poor, black, or Latino. These tactics are not only legal, but they are extraordinarily effective. The result is that the modern-day lottery generates billions in annual revenues. This is a remarkable achievement in an age of declining government revenues and soaring inequality.