In a year, lottery revenues from ticket sales alone generate more than $100 billion. No other business model can boast of such a haul.
Lotteries have a long history of being used to fund public projects, from building roads and ports to funding Harvard and Yale. George Washington even sponsored a lottery to raise money to fight the Revolution. Historically, they’ve been popular because they were a relatively painless form of taxation.
The concept is simple: People buy tickets and the winners are determined by chance. The prizes are generally cash and may be paid out over time in installments or in a lump sum. A prize can be anything from a new car to an island. But there’s more to it than that. It’s the implication of instant riches in an era of inequality and limited social mobility that’s really driving the popularity of lottery games.
It’s important to remember that the vast majority of lottery players and revenue come from middle-income neighborhoods. Studies show that poor people participate in state lotteries at lower levels than their percentage of the population. That doesn’t mean they don’t play, but it also doesn’t mean they aren’t motivated by a strong sense of desperation.
The first recorded lotteries involving tickets sold for chances to win cash prizes were held in the Low Countries in the 15th century, when a wide variety of towns organized them to raise money for town fortifications and other purposes. The term “lottery” was derived from the Dutch noun “lot,” meaning fate or fortune.