A lottery is a form of gambling in which people pay a small amount of money for the chance to win a large prize. It has long been popular in Europe and the United States, where it was used to raise funds for everything from constructing town fortifications to providing charity. In its modern form, a lottery involves paying for a ticket to be entered into a drawing for a grand prize. Some lotteries are run by state or national governments; others are privately organized. The prizes for winning the lottery are usually cash or goods. Despite the fact that lottery is considered a form of gambling, many people still play it, often with the hopes of becoming rich. But is it really wise to do so? Americans spend about $80 billion a year on the lottery. That’s a lot of money, especially considering that a big prize means that taxes will be taken out of the winnings and those who do win often find themselves bankrupt in a few years.
During the nineteen-seventies and eighties, when lottery popularity surged, American families experienced a sharp decline in financial security. The gap between the rich and poor widened, job security eroded, pensions shrank, and health-care costs rose. At the same time, America became obsessed with the notion of unimaginable wealth, symbolized by the lottery’s multimillion-dollar jackpots.
In a nation defined politically by its aversion to taxation, politicians saw in lotteries an opportunity to maintain public services without raising taxes. Lotteries were, as Cohen puts it, “budgetary miracles, the chance for states to make revenue appear seemingly out of thin air.”
The popularity of lotteries in the nineteen-eighties coincided with a deep recession that sent the economy into freefall and drove millions of working-class families to desperate measures. In addition to purchasing lottery tickets, many Americans sought other ways to get out of debt and build an emergency savings account. This included acquiring expensive credit cards and taking out payday loans. The result was that, as the nineties turned into the naughties, many working-class Americans were living beyond their means, making it harder and harder to achieve the financial freedom that they had been promised by their parents and their government.
Although there are a number of ethical objections to state-run lotteries, those who argue for legalization tend to ignore these concerns. Instead, they argue that the revenue generated by a lottery would be enough to cover a specific line item in a state budget-usually education or some other service deemed popular and nonpartisan. This approach made campaigning for lottery legalization much easier, because a vote for the lottery was not a vote for gambling but for something else. This, in turn, insulated lottery advocates from the broader debate over the propriety of taxing the populace.