The History of American Lottery


Lottery is a form of gambling where numbers are drawn at random to determine a prize. Some governments outlaw it, while others endorse it by organizing a national or state lottery. In addition to offering a financial reward, lottery can also be used as a way of promoting social justice or community spirit. Americans spend over $80 Billion on tickets each year. However, the odds of winning are very low and this money could be better spent on building an emergency fund or paying off debt.

The first recorded lotteries were held in the fifteenth century, when towns in the Netherlands and Flanders used them to raise money for town fortifications and charity for the poor. They were so popular that by the seventeenth century they were even a common way to finance wars and the European settlement of America. At the outset of the Revolutionary War, the Continental Congress had used lotteries to support the Colonial Army. Alexander Hamilton wrote that “everybody will be willing to hazard a trifling sum for the hope of considerable gain.”

As the number of state-sponsored lotteries increased during the late twentieth century, Cohen observes, it coincided with a national revolt against taxes. In the nineteen-seventies, income inequality widened; job security and pensions disappeared; health-care costs and unemployment rose; and the longstanding American promise that education and hard work would make one’s children wealthier than their parents became increasingly out of reach for most people.

Despite this, state-sponsored lotteries continued to grow, with jackpots reaching multimillion-dollar sums. The money was needed to support the growing population and rising health-care costs, but many states were unwilling to raise taxes or cut services. The solution was to increase the number of smaller prizes and lower the prize amounts, which meant fewer winners but higher ticket sales.

By the early nineteen-eighties, when California passed Proposition 13, cutting property taxes by almost sixty per cent, and Ronald Reagan was in the White House, a schism had opened within the country about whether the government should have anything to do with winning money. Some people argued that lottery profits were a hidden tax, while others thought that the state had a responsibility to provide jobs and basic services, and should not leave those in the middle class struggling to survive.

Today, the debate continues over how to balance the competing interests of raising public revenue and fostering civic values. Those who argue that state lotteries should be abolished point to the high levels of addiction and fraud. They are also concerned about the influence of big corporations, especially the cigarette and video-game industries, on the lottery’s marketing and advertising strategies. On the other hand, supporters of the lottery insist that the money is well spent and that it encourages hard-working citizens to save more and spend wisely. This may be true, but the state has not been above taking advantage of psychology and addiction theories in its quest to keep the profits flowing.