The lottery is the most popular form of gambling in America. It’s also an important source of state revenue. But the way in which it raises money is controversial, and there are broader implications for society.
Lottery is a game where participants buy a ticket, or shares in the lottery, for a chance to win prizes. Usually, the prize money is a set amount of money or a lump sum payment. Some prizes are predetermined and some are awarded based on the total number of tickets sold. Prizes may be cash, goods, services, or even real estate. The most common lottery games involve selecting numbers, but a few offer Quick Picks that select the numbers for you.
Buying tickets is easy and cheap, making lottery a very accessible form of gambling. In fact, 50 percent of Americans buy at least one lottery ticket a year. But who plays the lottery? The answer is that it’s largely people from low-income, less educated, and nonwhite communities. These groups are disproportionately represented in the top 20 to 30 percent of players, and they spend as much as 70 to 80 percent of all lottery purchases.
A lot of people play the lottery simply because they like to gamble. There’s nothing wrong with that, but there are a couple of problems with it. First of all, there’s the fact that it isn’t necessarily very fair. The odds of winning a large prize are slim, and the winners are often not very deserving. In addition, the lottery tends to attract risk-takers and investors who are willing to buy multiple tickets in an attempt to beat the odds. Romanian-born mathematician Stefan Mandel once used this strategy to win the lottery 14 times, but it only earned him about $1.3 million.
Lotteries are controversial for another reason: They make governments at all levels dependent on a form of gambling from which they profit. This has led to increased scrutiny of the operation of the lottery, especially its impact on compulsive gamblers and its alleged regressive effects on lower-income communities. It’s also produced pressures for states to promote new forms of gambling.
Ultimately, whether or not you’re a fan of the lottery, it’s worth remembering that it’s only a part of our culture, not the entire one. So, if you do choose to play, make sure you’re aware of all the risks involved and keep your spending in check. Otherwise, you’ll find yourself like the guy who went to Hawthorne’s Blue Bird Liquors in Los Angeles, dropped two dollars on a Mega Millions ticket, and lost hundreds of millions of dollars. And that’s a shame. Khristopher J. Brooks is a CBS MoneyWatch reporter and has written for the Omaha World-Herald, Newsday, and the Florida Times-Union. He specializes in economics and business, including the U.S. housing market, the business of sports, and bankruptcy. Follow him on Twitter @KhristopherBrooks.