In the United States, more than $100 billion in lottery tickets are sold each year. That makes state and national lotteries one of the most profitable business models in existence. And yet, this is also a very controversial industry. The lottery raises many different concerns, including its role as a hidden tax and the fact that it can trigger compulsive gambling behaviors. It also has a troubling underbelly: the fact that so many people feel that winning the lottery, no matter how improbable it may be, is their only way out of poverty.
Despite these problems, lottery supporters have made their main argument by emphasizing that the game is not gambling in the strict sense of the word. In the 15th century, a number of towns in the Low Countries began to use lotteries as a means of raising money for town fortifications and helping the poor. Benjamin Franklin even sponsored a lottery to help finance the purchase of cannons for his city during the Revolutionary War.
The biggest winner from lottery drawings, however, is the state government. It takes in about 44 cents of every dollar spent on a ticket. Retailers are another big winner, often receiving bonuses for selling winning tickets. And a small percentage of the profits goes to players who have won the big prizes. But the vast majority of players are people from middle- and upper-income neighborhoods, with fewer than their share of lower-income neighborhood residents. In a society that is increasingly unwilling to pay taxes, lottery revenues have become a convenient source of “painless” income.