The Ugly Underbelly of the Lottery


Lottery is a form of gambling, and people who play it have to know that there’s no such thing as “winning”. The chances of winning are slim. In fact, you’re more likely to get struck by lightning or become a billionaire than win the lottery. But, despite this, the lottery is still a huge business. It has an ugly underbelly, too. People who win the lottery can end up worse off than they were before winning. They can even lose the happiness that they gained from their windfall. There are several reasons for this, including addiction, financial disaster, and a host of other issues.

The first recorded lottery was held in the Low Countries around 1525, to raise money for town fortifications and help the poor. Privately organized lotteries were common as early as 1745, despite Protestant proscriptions against gambling and the fact that dice weren’t allowed in public. By the nineteenth century, they were widespread in America. Lotteries provided a good source of income for governments and licensed promoters, and helped finance many projects in the colonies, including Harvard, Yale, Dartmouth, King’s College (now Columbia), and Boston’s Faneuil Hall.

In his book, the Romanian-born mathematician Stefan Mandel describes a formula for winning the lottery that works by getting people to buy tickets in order to cover every possible combination of numbers. Using this method, Mandel has won more than 14 times in his career. However, his method isn’t foolproof, and he has lost large sums of money in the past. According to consumer financial company Bankrate, people who make more than fifty thousand dollars per year spend about one percent of their income on lottery tickets, while those who make less than thirty-thousand dollars spend thirteen per cent.

Cohen, the journalist, is careful to note that there are valid concerns about lotteries, especially their regressivity. However, he argues that these concerns were largely ignored as the lottery became popular in America. This started, he writes, when awareness of the massive potential profits from lotteries collided with a crisis in state funding. The growing population and rising costs of a social safety net made it increasingly difficult for states to balance budgets without raising taxes or cutting services.

In the nineteen-sixties, New Hampshire approved the first modern state lottery. Other states soon followed, and lottery revenues began to pour in. This, combined with a late-twentieth-century tax revolt, led to a decline in federal funds flowing into state coffers. The result has been a sharp drop in spending on public education, the arts, and other programs. Lotteries are now one of the few remaining revenue streams for state governments.