The Hidden History of the Lottery


There’s a certain inexorable human impulse to gamble. Lotteries dangle the promise of instant riches, and as a result they’re popular. But there’s more to them than that, and it has to do with the way lottery winners’ money is used.

The term “lottery” dates back to Roman times (Nero was a fan) and, as with many other activities involving the casting of lots, they could be deployed in a variety of ways: as a form of entertainment, to determine who would get a particular prize in a sporting event or a public auction, or as an alternative method of funding a project. In modern times, state-run lotteries are commonplace and are often viewed as the best option for governments looking to bolster their coffers without incurring the costs associated with raising taxes.

In the early eighteenth century, for example, when a number of American colleges were established, lottery proceeds helped finance them. But the practice also served as a way for businesses and private citizens to raise funds for a host of public projects, such as constructing buildings or buying land. In fact, a Boston Mercantile Journal article in 1832 reported that “the large majority of the public buildings constructed in America have been built through private and public lotteries.”

As the nation entered the late twentieth century, however, states found themselves scrambling for solutions to their budgetary crises that wouldn’t provoke tax revolt at the polls. With a host of new problems emerging, legislators began turning to the lottery as a solution—in Cohen’s words, “a budgetary miracle that allowed them to make hundreds of millions appear seemingly out of thin air.”

When the economy faltered and poverty rates rose, lotteries saw their sales increase. The appeal was simple: Players would pay a few dollars to play for the chance to win thousands of times that amount. It’s easy to see why such a low-risk investment is attractive, even though those billions in ticket purchases represent foregone savings that people could have used on retirement or college tuition.

But, as time went by and the recession of the early nineties deepened, the public’s appetite for lottery gambling waned. For many, the notion that they were foregoing savings to support a gambling addiction seemed morally questionable.

As a result, legalization advocates began a shift in strategy. Instead of arguing that a lottery would float most of a state’s budget, they began to claim it would fund a single line item—invariably some kind of government service that was popular and nonpartisan, such as education or aid for veterans. This approach made it easier to sell legalization, because it meant that a vote for the lottery was a vote for the service in question. In some cases, it even sounded like a vote against drugs. For example, in Ohio in 2006, a group called “Stop Illegal Gambling” campaigned for a ballot measure that would have required casinos to pay a ten percent tax on their gross revenue.