The History of the Lottery
The lottery is an institution with a long history. The first known keno slip dates from the Han dynasty, and records of lotteries in the Low Countries indicate that public money prizes were awarded as early as 15th century — raising funds for town fortifications or helping poor citizens. Private lotteries, such as those offered by tobacco or video-game jwtogel manufacturers, have also been a common way to keep customers coming back for more. And the public lottery, a major source of state revenue, is not immune from the same psychology.
The modern lottery grew out of America’s late-twentieth-century tax revolt, when voters demanded that their state governments spend more while keeping taxes low. Its rise coincided with a crisis in state finance, exacerbated by booming population growth and rising inflation. During the nineteen-sixties, state lotteries became a popular way to balance budgets without either raising taxes or cutting services.
Today, lotteries draw a remarkably wide audience. In addition to the traditional drawing of numbers for a prize, many offer “instant games” with lower prize amounts but still high odds of winning. Some of these games are sold by retailers, such as a gas station or convenience store, while others are sold by state lotteries themselves. In all, Americans spend more than $80 billion a year on these games, which are promoted through television and radio ads, billboards, and commercials.
In the past, most state lotteries were similar to traditional raffles. The public bought tickets for a future drawing, usually weeks or even months away. But innovations in the 1970s dramatically changed the industry. New games, such as scratch-off tickets with smaller prize amounts but higher odds of winning, boosted ticket sales.
Another innovation was the introduction of a “multi-state game.” This allowed the public to participate in a single drawing that involved multiple states and therefore offered more potential prizes. The multi-state game has grown to become the largest and most profitable in the world.
Although the state lotteries’ success in keeping revenues up has been remarkable, they are not without critics. Some of these criticisms focus on the alleged problems of compulsive gambling and the regressive impact of the lottery on lower-income communities.
But Cohen’s argument is that these criticisms miss the point. The real problem is the nature of lottery revenues. They are not transparent to consumers in the same way that a regular tax is. So, when the lottery generates a surplus, it is easy for politicians to use the surplus to fund things like education, which are not directly related to the lottery’s core business of selling chances on future drawings. As a result, the public’s relationship with the lottery is more like that of tobacco or video games than it is with a tax. And it is precisely because of this that people continue to buy tickets. The only question is how much longer that relationship will last.