The Hidden Costs of Lottery Gambling


In a lottery, a person has the opportunity to win a prize by selecting a series of numbers or symbols. The winnings are then awarded according to a random procedure, such as drawing lots or casting counterfoils (or their equivalent). Most lotteries are governed by the state, which either runs the operation directly or licenses a private firm in return for a fixed percentage of proceeds. In the United States, state lotteries are the most common form of legal gambling.

Historically, states adopted lotteries as a way to raise funds for public projects without especially onerous taxes on the middle class and working class. As time went on, however, many states found that lottery revenues were not as large as they had hoped. In addition, the public’s attitude toward lottery gambling evolved. The first big change was the advent of daily numbers games, modeled on the illegal numbers games commonly found in American cities. These games offered a much more personal and direct connection to the prizes, as each player could choose his or her own number.

The jackpots of these games also increased enormously, which created a windfall for the media and generated huge interest in the games. But there were other, hidden costs to all of this.

For example, because the lotteries were run as businesses with a focus on maximizing revenues, they were able to promote their offerings by appealing to people’s baser impulses to gamble. This inevitably led to some negative consequences, such as compulsive gambling and its regressive effects on lower-income groups.