The History of the Lottery

The word “lottery” is derived from Middle Dutch loterie, meaning to cast lots. Public lotteries in the form of money prizes became commonplace in the Low Countries in the fifteenth century, used mainly to raise funds for town fortifications and charity for the poor. It is possible that such lotteries were held much earlier, but no record of them has survived.

In the seventeenth century, the lottery migrated to England, where it was popular among the gentry. By the eighteenth century, it had become a fixture in the British constitution and culture. The British had developed a peculiarly sophisticated system of taxation, and lotteries were one of many sources of revenue. The prize was typically a cash lump sum, but sometimes it was land or property. In the nineteenth century, a series of state-sponsored lotteries spread across the United States, with the prize usually being a large sum of money.

The idea behind lotteries is that people have a small chance of becoming rich by buying a ticket. The odds, as it turns out, make a huge difference, but it doesn’t feel like that to the average person who buys a ticket. It is as though, even if the actual odds of winning are one-in-three million, we can convince ourselves that it’s not really all that risky because the initial odds are so fantastic. This is an old trick from the gambling business, and it’s also a big reason why it’s so hard to quit.

During the early years of American settlement, lotteries became common in the colonies and formed a rare point of consensus between Thomas Jefferson, who regarded them as only slightly riskier than farming, and Alexander Hamilton, who grasped what would become the essence of the lottery: that everyone “would prefer a small chance of winning a great deal to a large chance of winning little.” The history of America’s lotteries is a strange one. Like almost everything else in early America, it got tangled up with slavery. George Washington once managed a lottery that offered slaves as prizes, and one enslaved man, Denmark Vesey, purchased his freedom with winnings from a South Carolina lottery and went on to foment the revolution.

In the decades that followed World War II, lottery proponents claimed that it would be a way for states to make dollars appear seemingly out of thin air and to maintain government services without burdening working-class Americans with a new tax rate. As the postwar economy sputtered, however, lottery sales fell. No longer able to sell the idea that a lottery would float a state’s budget, legalization advocates ginned up other strategies. They began to argue that it could subsidize a specific line item in the budget, usually education but sometimes elderly care or public parks or veterans’ benefits. This narrower strategy was more palatable to antitax voters, and it helped the movement spread.