The Truth About Lottery Profits


A lottery is a form of gambling where the participants bet a small amount of money with the chance of winning a large prize. Sometimes the money raised in a lottery is used for good causes in the public sector. The first recorded lotteries were held in the Low Countries during the 14th century, raising funds for town fortifications and to help the poor. Initially, each ticket cost ten shillings, a substantial sum back then. The idea of the lottery spread to England in the sixteenth century, where it became popular among the wealthy classes.

Lottery profits have grown in recent years as states cast about for ways to bolster their social safety nets without incurring the wrath of an anti-tax populace. During this period, state governments have come to believe that the lottery is one of the few things they can do that will not make their budgets worse.

In a way, lotteries work on a basic human instinct: most people will choose a big, unlikely risk over a smaller, more likely one. Lottery commissioners have understood this, and have taken advantage of it by lowering the odds of winning (for example, from one-in-three million to one-in-three hundred million) and increasing the size of jackpots.

The truth is, these moves have done more to increase lottery revenues than if the odds had been left unchanged. But it’s also true that most people don’t understand the math, and thus don’t realize that their chances of winning have actually decreased.