The Hidden Costs of Playing the Lottery
A lottery is an arrangement in which tokens or lots are drawn to determine ownership or other rights, such as the allocation of a campsite or the awarding of scholarships. The word lottery dates to the early sixteenth century, and it was brought directly to America by King James in 1612. People continued to use lotteries to raise money for towns, wars, college scholarships, and public works projects after that time, including the building of the White House, George Washington’s Military Academy, and Benjamin Franklin’s Faneuil Hall in Boston. In general, lotteries have a high disutility for most participants, but some people find the entertainment value or other non-monetary benefits of playing them to be worth the cost.
People spend billions on state-sponsored lotteries each year, which is a substantial chunk of the income they could be saving for retirement or their children’s college tuitions. But what’s more troubling is that many of those who play the lottery do so for years and spend a huge amount of their income on tickets. Despite the odds of winning being slim, these committed gamblers haven’t been able to stop themselves.
Some governments promote lotteries by arguing that the money spent on tickets is a form of taxation and that it helps fund public services. But this argument is misleading. Lottery revenue may be important to a state budget, but it obscures the fact that a lot of lottery players are spending their money on an expensive game with bad odds.