When states adopt lotteries, they typically legislate a state monopoly; establish an agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a percentage of the profits); begin operations with a modest number of relatively simple games; and – due to pressures to generate additional revenues – progressively expand the size, scope, and complexity of the operation. These expansions generally involve the introduction of new games and the acquisition of a variety of related assets, including technology, advertising, sales and marketing support, prize promotions, and management expertise.
In the process, states also build up extensive specific constituencies: convenience store operators; lottery suppliers (heavy contributions to state political campaigns by these firms are routinely reported); teachers (in states where a portion of lotteries’ proceeds is earmarked for education); and state legislators themselves, who quickly become accustomed to the extra funds that lotteries provide. Moreover, in the course of their evolution, many state lotteries develop a strong reputation for being fair and unbiased.
These factors help to explain the broad public approval that has accompanied the introduction of state lotteries, which have gained tremendous popularity in recent years. The underlying sentiment is that by supporting public education, lotteries are a responsible way to raise money, rather than burdening the working class with increased taxes or draconian cuts in services.
Yet, as many critics point out, the success of the lottery industry in winning broad public approval and generating substantial revenues is often marred by its deceptive advertising practices. This is especially true for lottery advertisements that present misleading odds information or inflate the value of lottery prizes (prizes are typically paid out in a series of equal annual installments over 20 years, with inflation and taxes dramatically eroding their current value).
Moreover, despite the fact that they know their chances of winning are slim, most lottery players continue to play because there is a small sliver of hope that they will somehow be the exception. This irrational behavior demonstrates the depth of human insecurity and longing that we feel, in a world where social mobility is limited and wealth inequality is growing rapidly.
I have spoken to a number of lottery players, people who play for years and spend $50 or $100 a week. These are shrewd, hard-working people, and they defy the expectations that you might have going into a conversation with them: that they must be irrational; that they don’t understand the odds; that they have quote-unquote “systems” that work; that they use special software or rely on astrology; that they buy tickets in certain stores or at certain times; that they use significant dates such as birthdays, ages, or other personal numbers. All of these systems are worthless; there is no system or method that can predict what numbers will be drawn in a random lottery draw. Only a tiny fraction of lottery numbers are ever drawn as all even or all odd.