Whether it’s buying Powerball and Mega Millions tickets at the local check-cashing shop or picking up fifty-dollar scratch-offs while paying for groceries at a Dollar General, there is an inextricable human impulse to play lotteries. And lottery marketers are not above availing themselves of that psychology. The math behind their advertising campaigns, the design of the ticket, and the way they structure the payouts are all designed to keep players hooked. In fact, it isn’t so different from the strategies of video-game makers or tobacco companies – it’s just normally done under the auspices of state government.
Lotteries are popular in the United States and contribute billions of dollars to state budgets every year. Many people play them for entertainment, while others believe that winning the jackpot will make their life better. But if you are not rich, the odds of hitting the jackpot are very low. And even if you win, the money will likely not change your life in any meaningful way.
A lottery is a form of gambling, and it has roots in ancient history. The Old Testament instructed Moses to divide land by lottery; Roman emperors used it to give away slaves and property; and in colonial America, it was often tangled up with the slavery trade. George Washington once managed a lottery where the prize was human beings, and the Continental Congress used a lottery to help finance the Revolutionary War.
Early America was not morally or fiscally austere, however, and lotteries became a popular way to raise money for everything from canals and bridges to churches and schools. The lottery also helped fund the construction of the universities of Harvard, Yale, and Princeton. Lotteries became particularly appealing in a society that was defined politically by an aversion to taxation.
In the immediate post-World War II period, as economic security in society eroded and taxes rose, a growing number of Americans began to use the lottery as a substitute for raising taxes, which were perceived as especially onerous. The lottery is a form of gambling that relies on the notion that people are not rational; that they will make decisions based solely on their current preferences and values. This belief is a dangerous delusion, but it underlies much of the marketing and sales strategy of the modern lottery industry.
Lottery commissions advertise the size of a jackpot, but they do not discuss how it will change someone’s life or how it will benefit society. Instead, they are relying on two messages – both of which are coded to be false:
The first message is that the lottery is a fun game, and if you purchase a ticket, you are doing something civic-duty worthy. This message obscures how regressive the lottery is, and it also obscures that the average player loses more than they gain. The other message is that a large prize will provide you with a larger annuity payout over time, which will increase your overall wealth and well-being.