Is the Lottery a Waste of Money?


The lottery is a fixture in American society, and the numbers are in: Americans spent upward of $100 billion on tickets last year. But while it sounds like a huge sum, in the context of state budgets, that’s just a drop in the bucket. So is the lottery really a waste of money? Or is it just a way for states to rake in cash?

The earliest lotteries in the modern sense of the word began in 15th-century Burgundy and Flanders, with towns attempting to raise money for town fortifications or to assist the poor. They resembled the ventura, an ancient Italian lottery in which prizes were awarded to the winners in the form of goods or services.

In the 17th century, private and public lotteries helped to finance American colleges and other ventures. The Continental Congress used lotteries to help finance the Revolutionary War, and after the war many states adopted lotteries as a means of raising funds for public works. In the late 18th and early 19th centuries, the number of legalized lotteries in the United States increased significantly.

Unlike other gambling games, where the prize money is determined by chance, the lottery draws winners from all entrants who have purchased tickets. The prizes are often set at a certain level, and a fixed percentage of ticket sales goes to the winner. The rest of the proceeds are devoted to promoting and administering the lottery, paying taxes and administrative expenses, and making the prize fund available for winnings.

Lotteries are popular because they offer a small chance to win a large amount of money without much risk. But they can also be addictive and harmful. The psychological and emotional costs of playing the lottery can be tremendous, especially for people who are in need of financial help or those who are unable to work because of illness or disability. Lottery playing can also have a negative impact on family relationships and even health.

A large percentage of lottery players are lower-income, less educated, and nonwhite. And while the lottery is touted as a way for governments to raise money, the reality is that only 40 percent of every dollar is actually collected for the state. And that ends up being a drop in the bucket for actual state budgets — by some estimates, as little as 1 to 2 percent.

But it’s possible to play the lottery in a responsible and intelligent way. One strategy is to buy multiple tickets and spread the cost. Another is to join a syndicate with friends and coworkers. In a syndicate, you each put in a small amount and then purchase tickets together. That increases your chances of winning, but the total payout is smaller because you’re sharing the prize money. Lastly, choose the right numbers. Harvard statistics professor Mark Glickman recommends picking random numbers or using Quick Picks rather than selecting numbers based on significant dates such as birthdays, ages of children, or sequences like 1-2-3-4-5-6.