The Official Lottery

For a long time, states tended to think of the lottery as a way of getting money that they couldn’t raise through taxes. The state, in other words, was convinced that gambling is inevitable, so why not capture some of it? There’s another reason why lotteries were so popular: They raised a relatively small amount of money, and it came in the form of an interest-free loan to the state.

In Cohen’s telling, the modern incarnation of the official lottery started in the immediate post-World War II period, when rising inflation and the cost of Vietnam and other wars made it harder for states to balance their budgets without raising taxes or cutting services. State governments, especially those with generous social safety nets, turned to the lottery, which would allow them to expand their array of services while not increasing taxes.

The prizes can be a fixed amount of cash or goods, or they can represent a percentage of ticket sales. Generally, the prize fund ends up being very inefficiently collected; by some estimates, it’s as little as 1 to 2 percent of total state revenue.

In his book, Cohen argues that the popularity of the lottery is partly a result of a desire by Americans to believe in a meritocratic society where anyone can make it big if they try hard enough. He also points out that lottery advertisements target low income communities, and research shows they spend more on lottery games than higher-income groups.