How the Lottery Works

Despite the negative image attached to lottery by some, it has been an important source of funds for a variety of public works projects, from paving streets to building colleges. George Washington even sponsored a lottery to raise money for his army, and the Continental Congress used lotteries to help fund the Revolutionary War. The idea of casting lots to determine fates or distribute wealth has a long history in human culture (the Old Testament references it, and Roman emperors also used it), but it gained wide popularity during the 17th century when Europeans introduced it to America.

Several states introduced state lotteries in the 1960s, and most of them followed similar patterns: legislation creating a monopoly for the lottery; a government agency or public corporation running it; starting operations with a small number of relatively simple games; and, as pressure for additional revenues increased, progressively expanding the lottery with new games, including scratch-off tickets. The growth in lottery sales stalled in the 1970s, however, and the number of people buying tickets declined.

Most people who buy lottery tickets are not doing so because they have a real expectation of winning—that is, they do not expect to stand on a stage with an oversized check for millions of dollars. Instead, they buy into a fantasy, and for a moment of time they imagine what they would do with the money. The utility they gain from this fantasy outweighs the disutility of a monetary loss, so purchasing the ticket is a rational choice for them.