A lottery is an arrangement in which prizes (money, goods, services, land) are allocated by a process that depends wholly on chance. The first recorded lotteries, which offered tickets with cash as prizes, appeared in the Low Countries in the 15th century, according to town records from Bruges, Ghent, and other cities. These early lotteries were used to fund town fortifications, and help the poor.
Today state lotteries are a major source of revenue, with Americans spending over $100 billion per year on tickets. But the lottery’s history, both as a private game and public enterprise, is not always an easy one. Here are three things to know about it.
The lottery’s roots are in gambling. While Puritans saw gambling as a sin and a doorway to worse vices, the idea of winning money through luck was common enough in New England for Denmark Vesey—who won a local lottery in 1722 and then used the prize money to buy his freedom from slavery—to purchase a ticket and then plan a slave revolt. But religious and moral sensibilities turned against gambling in the 1800s, beginning with prohibition and then more broadly. In addition, corruption grew rampant during this time. “Lottery organizers could just sell tickets and abscond with the proceeds,” Matheson says. “So there was a little bit of both public policy and social welfare protection to get rid of lotteries that were corrupt.”
In the United States, state lotteries became legalized starting in the mid-19th century, largely because they offered larger jackpots and lower operating costs than private games. They also helped states expand their social safety nets without having to increase taxes on middle- and working-class families, which was politically difficult during a period of economic stress. In addition, the lottery was a way to raise money for wars and to promote patriotism, which was especially important during the Civil War.
As a result, many of the founding fathers were big fans. Benjamin Franklin organized a lottery to help finance his defenses in Philadelphia, and John Hancock ran one to build Boston’s Faneuil Hall. George Washington ran a lottery to finance his attempt to build a road over Virginia’s mountain pass, and rare tickets bearing his signature are now collectors’ items.
But the lottery has a complicated relationship to luck, and not all people are equally adept at evaluating risk and reward. Some are more naturally predisposed to the concept of chance and its potential for rewarding them with the prize of a lifetime, while others are simply more impulsive. For these people, the lottery is an irresistible temptation that can have catastrophic consequences if they’re not careful. For this reason, it’s critical for any serious lottery player to understand the psychology of winning. And that starts by learning a few basic statistics about the odds of winning. Here are a few of the most important ones: