The Insidious Underbelly of Lottery Games

The casting of lots to determine fate has a long record in human history. During the 15th century public lotteries were common in the Netherlands, where lottery games raised money for a wide variety of town needs, from building walls to helping the poor. The Dutch state-owned Staatsloterij is the oldest running lottery (1726).

States that adopt lotteries often cite them as an example of “painless revenue”: citizens voluntarily spend their own money for a public purpose, without being subject to taxation or government budget cuts. This argument is particularly effective during economic stress. However, recent studies suggest that the popularity of lotteries does not depend on the state’s objective fiscal condition.

Moreover, the growth in ticket sales has often been fueled by new games and increased promotional spending. This has resulted in an overall decline in the average prize amount. This in turn has led to a more aggressive pursuit of sales and marketing strategies, including increased use of digital media.

While the regressivity of lotteries is well documented, there is a more insidious underbelly. People who buy tickets do so despite being fully aware that the odds of winning are long, and they know that it’s not “fair.” They also know that they are gambling away some portion of their incomes and, as such, have come to the logical conclusion that they should keep playing because, hey, someone has to win, right? This is not a rational way to think.