The Ugly Underbelly of the Lottery


The practice of dividing property or other fates by lot is of ancient origin, with several examples in the Bible. But lotteries as commercial enterprises of money prizes are relatively recent, with earliest examples in the 15th century Burgundy and Flanders with towns trying to raise funds for war or charity; and the first public lottery awarding cash prizes for money prizes was probably the ventura in 1476 at a dinner entertainment in the Italian city-state of Modena, held at the palace of the wealthy d’Este family (see House of Este).

State governments regulate lotteries and establish laws, but actual operations are delegated to independent companies called lotteries, which manage lotteries and sell tickets, redeem winning tickets and record results, promote and market games, and pay high-tier prize winners. The company profits from selling the tickets and collecting taxes on sales. The profit is often used for public education, state infrastructure and other purposes.

Many people play the lottery because they plain old like to gamble. But there’s also the ugly underbelly: The lottery is a powerful way to lure people into hopeless situations, with the promise of instant riches and a quick path out of poverty.

In addition, the marketing strategies employed by state lotteries are problematic, with a focus on promoting gambling to all segments of the population and a lack of regard for specific groups at risk (poor, problem gamblers). The promotional campaigns often rely on misleading information about odds of winning (for example, announcing that a jackpot will be paid in equal annual installments over 20 years, when inflation erodes the value), and they inflate the value of prizes won.

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