The lottery has long been a fixture in American society and, at $100 billion per year, the country’s most popular form of gambling. States promote it by spending millions of dollars in advertising aimed at persuading people to spend their money on tickets. This strategy raises important questions about whether it is appropriate for government to be running a business that promotes gambling — and if so, how it might minimize its negative consequences for poor people, problem gamblers, etc.
Lotteries are games of chance and involve a great deal of luck, and they are usually based on the drawing of numbers or symbols that correspond to specific prizes. The first public lotteries to offer prize money were held in the Low Countries in the 15th century as a way of raising funds for town fortifications and helping the poor. Private lotteries became increasingly popular in England and the United States in the early 19th century, enabling private entrepreneurs to sell products or property for more money than could be obtained through a conventional sale. Some lotteries, like the famous ’50/50′ draws at local events, gave the winner half of all proceeds; others awarded larger sums to individuals or groups of individuals. Private lotteries also helped fund several prominent American colleges, including Harvard, Dartmouth, Yale, King’s College (now Columbia), William and Mary, Union, and Brown.
One of the most successful messages lotteries use is that the money they raise for state governments is a benefit to society, which can be interpreted as a ‘civic duty’ to buy a ticket. This message is particularly effective in times of economic stress, such as when state budgets are being squeezed or tax increases are on the horizon. However, studies show that the popularity of lotteries is not related to a state’s actual fiscal conditions, and they often have broad support even when a state’s budgetary situation is healthy.
Another key message that lotteries send is that there are a variety of ways to win, and they try to distinguish themselves from other types of gambling. The implication is that lottery winners are more “successful” than those who play other kinds of gambling. The truth, of course, is that there are many factors that can affect a person’s success in gambling: his or her level of skill; the number and frequency of plays; the timing of purchases; his or her income; social status; and more. Men tend to play more than women; blacks and Hispanics more than whites; and young people less than middle age people.
There are many other problems with lottery advertising, such as misleading presentation of odds of winning (lotto jackpots are typically paid in equal annual installments over 20 years, allowing for inflation to significantly diminish the current value); inflated values of the prize money (prizes are usually quoted in terms of a lump sum that is substantially lower than what most people would actually receive if they bought a ticket); and so on.