The Lottery and Inequality
The lottery is a game of chance in which numbers are drawn at random for a prize. It’s also a form of gambling, and governments are split on how to deal with it. Some outlaw it, others endorse it and regulate it to some extent. In the United States, lotteries raise more than $60 billion a year—and they have an inextricable relationship to inequality.
While the casting of lots for decisions and determining fates has a long history in human culture, lotteries in the modern sense of the word were first introduced in Europe by the fourteen-hundreds. Initially, they were used to raise money for town fortifications and later for charity and public welfare. They’ve been a major source of state revenue ever since.
Whether the prizes are small or large, lotteries rely on a similar strategy to attract participants: they promise a high-value, low-risk opportunity that combines entertainment value with the potential for non-monetary benefits. This can make them a rational choice for individuals who can measure the expected utility of both monetary and non-monetary gains. But for those who are poor or lack the opportunity to calculate their expected utilities, a ticket represents an irrational gamble with their life savings.
To maximize their profits, lotteries promote super-sized jackpots that earn the games a windfall of free publicity on news sites and newscasts. But a bigger prize means the likelihood of winning is much lower. And the best way to keep the prize growing to apparently newsworthy amounts is to lower the odds of winning, which means the top prize must be carried over into future drawings—thus lowering the overall probability of winning and boosting sales even further.
As a result, lottery players’ expectations are consistently skewed. The odds of winning a prize have been getting worse and worse over time. And yet people continue to buy tickets. To better understand why, we can look at the details of how lotteries are run.
When advocates of legalized gambling started out, they argued that the proceeds would be earmarked for a specific government service—most often education but sometimes elder care or public parks—making it easier to sell to voters. When that proved less successful, they began touting the idea that a vote for the lottery was a vote for education or some other non-partisan cause. This narrower argument was more effective. It obscured the regressivity of the lottery and allowed it to win broad support even when a state’s actual fiscal health was sound. But it was also a disingenuous claim, because there is no evidence that lottery revenues actually improve the quality of public services.
