The Ugly Underbelly of the Lottery

The lottery is a game of chance in which people choose numbers and hope to win. It’s an addictive form of gambling that has a number of downsides for those who play. But the lottery isn’t a zero-sum game—it’s a good way for states to raise money. Lottery revenue has exploded to $100 billion annually, but there’s an ugly underbelly that can leave families worse off than before.

The first lotteries were held in the Low Countries in the 15th century, with town records indicating that they were used to raise funds for building walls and fortifications as well as for helping the poor. The word “lottery” itself is thought to come from the Dutch noun lot (“fate”), which in turn is likely a derivation of Middle Dutch loten (to cast lots), or perhaps a calque on Middle French loterie (action of drawing lots).

Today, state-sponsored lotteries are found in all 50 states and the District of Columbia. Almost universally, they operate in similar ways: the state legislates a monopoly; selects an agency or public corporation to run the lotteries (rather than licensing a private firm for a cut of the proceeds); starts with a small number of relatively simple games and subsequently expands them over time; and draws upon advertising and promotional tactics that are similar to those used by other commercial enterprises.

Lotteries are often touted as a good source of state revenue because they draw on players’ voluntary expenditure of money for a chance to win an indefinite amount of it back. But the chances of winning a jackpot are incredibly slim, and there have been many harrowing stories of people who have lost it all—such as Abraham Shakespeare, who was killed by his family after his 2006 winnings of $31 million; or Jeffrey Dampier, who was kidnapped and murdered after his $21 million windfall.