The Requirements of a Lottery


The lottery is the biggest form of gambling in the US, and it contributes billions to state coffers. But the big prize money isn’t the only reason people play: It’s a way to feel like they’re doing something good for their community. The odds of winning are incredibly low, but a lot of people believe that if they keep playing, they will eventually get that longshot jackpot. In this age of inequality and limited social mobility, that sliver of hope is enough to draw in millions of people each week.

The idea of making decisions or determining fates by drawing lots has a long history, but the lottery’s modern form has been around for just a few centuries. The name “lottery” probably derives from the Dutch word lot, which is a diminutive of the verb “to throw” or “to cast.” The Oxford English Dictionary notes that a lottery is “an event or game in which tokens are sold, and the winners are determined by chance, as in a drawing to determine space assignments in a campground,” but it also defines it more simply: “a contest in which tokens or numbers are drawn for a prize.”

There are several requirements that must be met in order to run a lottery. The first is some means of recording the identities and amounts staked by bettors. This can be as simple as a numbered receipt that the bettor writes his name on and a clerk records, or it can involve a special machine that records the bettor’s ticket number for shuffling and selection in a drawing. Once all bets are placed, the total pool of prizes is then divvied up between commissions for retailers and overhead costs for running the lottery system. A percentage of the winnings then goes to the state government, which may use it for a variety of purposes including infrastructure improvement and gambling addiction recovery programs.

A final requirement for a lottery is a set of rules that determine how often and in what sizes the prizes are awarded. Potential bettors tend to be attracted by high jackpots, which generate a lot of media attention and publicity and lead to a huge boost in ticket sales, but some cultures demand a greater proportion of smaller prizes as well. Choosing the right balance between large and small prizes requires some tricky balancing acts.

States promote their lotteries by claiming that the revenue they raise is essential for maintaining services and reducing taxes, but I’ve never seen those numbers put into context of overall state revenues. The message that lottery commissioners rely on is one of civic duty, that you’re doing your part for society by buying a ticket at the gas station. But that message obscures the regressivity of the lottery and how much money it drains from people’s wallets. It’s time for a more honest conversation about the true cost of this state-sponsored gamble.