The Modern Era of Lottery

For many people, lottery has become an integral part of their daily lives. It’s easy to see why: it’s cheap to participate (the tickets cost about as much as a Snickers bar) and state governments make a lot of money from the games, generating considerable public support for the activities. And the jackpots can be massive, making for some truly spectacular news coverage when they grow to astronomical levels.

But as Cohen shows, the modern era of lotteries began in the nineteen-sixties, just as America’s economic boom came to an abrupt end, and working families faced declining financial security. Incomes fell, job security vanished, health-care costs increased, pensions eroded, and the old national promise that hard work would leave children better off than their parents ceased to be true for most Americans.

This shift prompted a change in the strategy of lottery proponents. Instead of arguing that a lottery could float the entire state budget, they began arguing for a specific line item, always some sort of popular public service—usually education but sometimes elder care or public parks or aid to veterans. The new approach made it easier to win and retain public approval, because it was clear that a vote for the lottery was not a vote against a particular government program.

But this new strategy has its problems. For one thing, it fails to recognize that lottery play is irrational. A fully rational population would correctly calculate the expected value of participation and reduce their willingness to participate accordingly. But the reality is that people often buy lottery tickets even when they’re not rich—and irrationality tends to reinforce itself.