Across America, people spend billions of dollars every week on lottery tickets. It’s the most popular form of gambling in America, and it contributes to the bloated budgets of many states. But what are we really getting for the money we invest in this wacky gamble?
The earliest recorded lotteries date back to the Low Countries in the 15th century, where towns held public lotteries for town fortifications and to help poor citizens. They became more widely practiced with the introduction of state-sponsored lotteries in Europe.
It’s important to remember that when you buy a ticket, it’s not just about winning the jackpot—it’s about paying for overhead costs of running the lottery system. A percentage of each ticket is earmarked for this purpose, and the rest goes into the prize pool. That reduces the percentage of the jackpot that’s available to the winner, but it also ensures that the lottery can keep bringing in revenue.
The bulk of the money outside your winnings ends up going to participating states, who have complete control over how to use it. Some put it into specific programs like support centers for problem gambling, while others use it to boost the general fund for things like roadwork and school funding.
The biggest message that lottery commissions are relying on now is the idea that playing the lottery makes you feel good about yourself, because it’s something you can do to help your community. It’s a rosy, but flawed message, because it obscures the way in which lotteries are actually just another type of tax on ordinary citizens.