A lottery is an arrangement by which one or more prizes are allocated to members of a class based on the results of a process that relies solely on chance. In most cases, the prize is money, but other prizes might include units in a housing block or kindergarten placements at a prestigious public school.
The idea behind lotteries is to give ordinary people the opportunity to win big prizes that are beyond their reach on their own, and at a relatively low cost. A large portion of the population participates in lottery games, and the resulting revenues generate billions in profits each year. The profits are split between the players and the state, with some of the money used for public purposes and much of it distributed in the form of cash awards to individuals who match all or a subset of the winning numbers.
While state governments are not above experimenting with new revenue-generating strategies, they tend to stick to some well-worn patterns. They legislate a monopoly for themselves; establish a state agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits); start operations with a modest number of relatively simple games; and, as demand for additional revenues increases, progressively expand the range of available games.
Until recently, many advocates of lotteries promoted them as a way to get around longstanding ethical objections and reduce the overall burden of state government without raising taxes or cutting services. Cohen’s book is a valuable counterpoint to this narrative, offering an unvarnished account of the lottery’s evolution and its effect on state budgets.
From the very beginning, though, lotteries were not without controversy. In the fifteenth century, the practice was common in the Low Countries and raised money for town fortifications and to help the poor, among other things. The plot of William Shakespeare’s play “The Lottery” provides a vivid example of the way in which these early lotteries were often tangled up with slavery.
As the immediate post-World War II period wore on, however, America’s economic prosperity began to wane, and it became harder for states to fund their generous social safety nets without either raising taxes or cutting services. The latter option was particularly unpopular with voters.
The lottery arose as a solution to this dilemma. Advocates argued that it would be possible to generate enough revenue with a small tax on gamblers to cover the costs of a single line item in the state budget, usually something like education or health care.
As the demand for additional tickets grew, however, those same advocates began to face a new obstacle. As a general rule, lottery revenues increase dramatically after an initial rollout and then level off or decline, as players begin to become bored with the available offerings. To combat this, the industry has been constantly innovating, adding new games that offer lower prizes and higher odds of winning.