The word lottery derives from the Dutch noun lot, meaning “fate.” As early as the fourteenth century it was common in the Low Countries to hold public lotteries to raise funds for everything from town fortifications to charity and town houses. The Continental Congress even tried to use one to pay for the Revolutionary War. By the seventeenth century, lottery games had exploded in England, and were spreading to America, despite Protestant proscriptions against gambling. Here, as in the Netherlands, they were a popular way to raise money for a wide range of public purposes, and to do so without directly raising taxes (which were still seen as an onerous burden).
It was around this time that states began to take notice of the enormous popularity of these games. For decades, lottery revenue represented only a small fraction of state budgets, but the era of super-sized jackpots had begun, with the games becoming renowned for their potential for producing record-setting prizes.
As the jackpots rose, more people were drawn to the games. In the nineteen-sixties, the emergence of state-sponsored video poker machines, which could be played in bars and restaurants, further intensified interest in the lottery. By the late twentieth century, with the federal government cutting back on support for social safety net programs and states feeling the pinch of rising inflation and a growing population, lottery revenue had become an important component of many state budgets.
In an era of inequality and limited social mobility, the promise of instant riches is attractive to many people, especially those living in poor communities, where jobs are scarce and opportunities for advancement are limited. That’s why, at least on the surface, it makes sense for governments to offer large prize pools that attract players. The fact that the prizes are largely cash rather than goods also helps, since there’s more demand for cash than for other forms of merchandise.
There is a darker side to the lottery, however. Many experts have pointed out that it can be a form of gambling addiction, and that it can lead to financial ruin for the winners as well as the losers. Lottery advertising is designed to exploit this psychology, using slick images and sexy language to lure consumers into buying tickets. And once people get hooked on the game, they can easily spend tens of thousands of dollars in a short period.
The wealthy do play the lottery, of course; one Powerball jackpot reached a quarter of a billion dollars. But they buy fewer tickets than the poor do, and their purchases represent a much smaller percentage of their annual incomes. The average person making fifty thousand dollars or more a year will spend about one percent of their earnings on tickets; the same person earning less than thirty thousand dollars will spend thirteen percent.