How Does a Lottery Work?
The casting of lots to determine fates and distribute wealth has a long record in human history. The Old Testament instructs Moses to take a census of the people and divide land among them by lot, while Roman emperors used it to award slaves and property. But the lottery that grew up in modern America is quite different from the one described in the Bible and ancient Rome. It is, Cohen argues, “a political enterprise defined by exigency and fueled by the desire to avoid taxes.”
In its early days, the lottery was largely a public service, allowing towns to raise money for needed improvements without inconveniently raising taxes on their working-class constituents. It was also a tool for distributing money to worthy causes. Harvard, Yale, and Princeton were all financed in part by lotteries, as was the Revolutionary War.
By the late nineteen-sixties, however, the prosperity that had characterized the immediate postwar period began to crumble; inflation and the cost of the Vietnam War made it impossible for states to maintain their social safety nets without substantially increasing taxes or cutting services. That is when lottery advocates shifted gears, persuading voters that lotteries were an especially efficient way to generate painless state revenue.
To work, a lottery must meet several requirements. First, it must have a means of recording bettors’ identities and the amounts they stake. These are normally written on a ticket that is then deposited for shuffling and selection in the drawing, although some lotteries simply use a computer to record each bettors’ numbers or symbols. A percentage of the proceeds and profits is normally deducted as administrative costs, and the remainder must be available for the winners.
In order to be successful, a lottery must also offer something that the general population wants to win. Traditionally, this has been cash or goods. Some states have experimented with other prizes, such as automobiles or vacations. Nevertheless, most lotteries are dominated by cash prizes, and some of the highest-dollar prize amounts in the world have been awarded to lottery winners.
A lottery’s success also depends on its ability to sustain interest over time. Typically, revenues expand dramatically at the start but then begin to decline. To keep up interest, lotteries introduce new games or modify existing ones. The resulting expansions are often accompanied by claims that the new offerings are “the most innovative” ever offered. These innovations, however, are usually only cosmetic changes that fail to significantly change the basic dynamics of a lottery. In most cases, the same set of players buys most of the tickets. It is a group that includes convenience store owners (for whom lottery advertising is particularly effective); suppliers of state-licensed machines (who are heavily subsidized by the lotteries’ revenues); teachers (in states in which a large portion of the revenue is earmarked for education); and, finally, state legislators themselves, who grow accustomed to the regular flow of lottery cash.