The Costs of a Lottery

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A lottery is a popular form of gambling that can make people rich. But its costs merit scrutiny. Its regressive nature, the way that it draws in poorer players, and its trade-off with foregone savings on other things like education, retirement, or college tuition makes it something worth thinking about before you buy your next ticket.

In the past, lotteries were used to fund public works projects, including roads, canals, bridges, and even universities. It was the most common way that governments raised money in colonial America. Lotteries were also used to finance local militias, as well as to support the poor in the towns.

The first lotteries to offer tickets for sale and prizes in the form of cash were probably held in the Low Countries in the 15th century. Records from Ghent, Utrecht, and Bruges refer to lottery games raising funds for town fortifications and helping the poor.

Scratch-offs are the bread and butter of lottery commissions, generating between 60 to 65 percent of total sales. They are very regressive, because poorer people play them more than higher-income players. Powerball and Mega Millions are less regressive because the upper-middle class tend to play them once in a while. The more regressive lotteries are daily numbers games, which are particularly popular in Black communities. The top 20 to 30 percent of lottery players account for 80 to 85 percent of all sales. Those players are disproportionately low-income, less educated, and nonwhite.

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