The History of the Lottery


The lottery is a national pastime, bringing in billions of dollars each year from people who buy tickets with the hope that they will win. Yet its roots go back even farther, to ancient times when the casting of lots was used for everything from selecting a king to divining God’s will. In its modern form, a lottery involves purchasing a ticket that contains a selection of numbers between one and 59. Sometimes you can pick your own numbers, and other times the computer will randomly select them for you. The prize money, often cash or goods, is proportionally distributed to the number of numbers correctly matched.

The earliest recorded lotteries that offered tickets for sale with prizes in the form of money were held in the Low Countries in the 15th century. Town records from Bruges, Ghent, and Utrecht mention the sale of such tickets, which were distributed free to guests at dinner parties as an amusement during Saturnalia celebrations. They became a popular way to raise funds for local projects, such as building walls and town fortifications.

They also helped fund English colonial settlement in the American colonies, despite strong Protestant proscriptions against gambling. And, as historian Michael Cohen points out, they became a rare point of agreement between Thomas Jefferson and Alexander Hamilton, who grasped what would become the central paradox of the game: that “most people prefer a small chance of winning a great deal to a greater chance of winning little.”

In the United States, state-regulated lotteries continue to raise billions each year, and some people do become millionaires. But Cohen writes that most of these millionaires are in the very top tier of wealth, while most Americans are still struggling to make ends meet. The obsession with the dream of hitting a large jackpot coincides with a decline in financial security for most working people: incomes are flat or falling, job security is eroding, and pensions and health care costs are rising.

Lotteries do more than just promote this new wealth gap, Cohen argues. They are also addictive, a fact that is not hard to prove: Everything from the look of the ticket to the math behind it is designed to keep people buying. It is not unlike the strategies employed by tobacco companies or video-game makers, though it is unusual for government to use them.

Fortunately, there is an antidote to this addiction. Responsible lottery winners dump any extra cash into safe investments, such as real estate and mutual funds. They build an emergency fund, set aside some money for college, and rely on their crack team of helpers to manage all the other details of personal finance. And they remember that it is not just their own futures on the line; plenty of former lottery winners serve as cautionary tales about how easy it is to lose your fortune. Then they can focus on what matters most: making a difference in the lives of others.