The Dark Underbelly of the Lottery

The lottery is a massive enterprise that draws on the psychology of people’s desperate desire to beat long odds. Super-sized jackpots, like the $1.537 billion prize in 2018’s Mega Millions, attract attention and drive ticket sales. But there’s a dark underbelly to the game, too. Even if you do win, the prize can be taxed at up to half and many winners end up bankrupt in a few years. Americans spend more than $80 Billion a year on lotteries – that’s over $600 per household – money that could be better spent building emergency savings or paying off credit card debt.

The first state-sponsored lotteries appeared in the Low Countries in the 15th century to raise funds for town fortifications and poor relief, and to promote trade and civic pride. It is suggested that the word lotteries comes from the Dutch noun lot meaning fate or fortune, although it may also be a calque on Old English hlot (cognate with hull).

During colonial America, lotteries raised money for private and public ventures, including roads, canals, churches, colleges, and universities. George Washington even sponsored a lottery to fund his expedition against Canada. The lottery is a popular source of funding for government projects, including infrastructure and education. While some critics have argued that state lotteries are unfair, others have pointed to the fact that lottery proceeds earmarked for specific purposes actually reduce the appropriations a legislature would otherwise have had to allot from its general fund.