Is the Lottery a Public Good?

Lottery is a type of game in which a prize is assigned to one or more players by an arrangement that depends solely on chance. Its roots date back to the 15th century, and it’s often used as a means of raising funds for charitable, educational or government purposes. In the United States, state governments control lottery operations and provide the prizes. The first recorded evidence of lotteries are keno slips from the Chinese Han dynasty, dating from 205 to 187 BC. They helped raise money for important government projects such as the Great Wall of China.

Lotteries became more common during the period of economic prosperity that followed World War II. As the number of social services increased and state budgets grew, politicians were looking for ways to supplement their revenue sources without imposing particularly burdensome taxes on middle class and working class residents. The lottery was seen as a relatively painless way to boost revenues. Politicians were also impressed by the huge profits that could be generated from a small investment in ticket sales.

State legislatures established monopolies for themselves; created public corporations or agencies to run the lottery (as opposed to licensing private firms in return for a share of profits); started with a modest number of relatively simple games; and, as revenues grew, progressively expanded the scope and complexity of the lottery. The resulting lottery has become a powerful force in the economy, and one of the largest forms of gambling in the world.

The growth of lottery revenues has brought a host of issues with it, including the regressive impact on poor people and problem gamblers. But these are not just reactions to the lottery’s success, and they should be taken into account when evaluating whether it is an appropriate government function. Lotteries are run as businesses that focus on maximizing revenues through aggressive advertising campaigns. That approach inevitably places them at cross-purposes with the broader public interest.

While some people do cheat to win, the overwhelming majority of lottery players use a system that they devise for themselves. This often involves selecting numbers that are associated with significant events in their lives, such as birthdays and anniversaries. It can be risky, and it’s not foolproof, but it’s usually enough to reduce the odds of winning by a significant margin.

There is, however, a way to guarantee a win — and that is to purchase enough tickets to include every possible combination. This is called a “perfect storm” and is a technique that mathematician Stefan Mandel developed after decades of play and seven grand prize victories. It requires a large group of investors, but it’s not impossible to organize. You can read more about his strategy in this HuffPost article. And remember, never spend more than you can afford to lose in a lottery. NerdWallet has no financial relationship with any of the companies mentioned in this story. Learn more about how we’re compensated.