Why is the Lottery So Popular?

A lottery is an arrangement in which prizes are allocated to individuals through a process that relies entirely on chance. The expected utility of a given prize to an individual can outweigh the disutility of a monetary loss, allowing for rational purchases of tickets. This is why lottery play is popular even in places where gambling is illegal or against church and state law—and why many of our early universities, including Harvard, Yale, Princeton, and Columbia, were funded by lotteries, despite Protestant proscriptions against gambling.

In a society where government budgets are often tight, it is no wonder that states are eager to find new sources of revenue, and the lottery has become one of the most widely used. When a state adopts a lottery, the money is earmarked for some particular purpose, and this helps to sustain enthusiasm and legitimacy. It is also important that the lottery be attractive to potential players, and this requires a mix of large and small prizes. The cost of organizing and promoting the lottery must be deducted from the pool of winnings, as must a percentage for administrative expenses and profits.

Advocates of the lottery argue that it is a low-cost way to fund public goods, such as education. This argument is particularly effective during periods of economic stress, when state governments are most likely to impose new taxes and cut services. But studies have found that the popularity of lottery gambling is unrelated to state government’s actual fiscal health; it continues to win broad support even when a government faces no immediate financial crises.