The Hidden Costs of Playing the Lottery


A game of chance in which people buy numbered tickets and prizes are awarded to those whose numbers are chosen randomly. It is often sponsored by state or other organizations as a way to raise money.

In the United States, lottery players spend about $100 billion per year. The jackpots are big, and the winnings can be life-changing. But the lottery is not without cost, and some of those costs are hidden. The odds of winning are low, but the lottery can still be a psychologically addictive form of gambling. It lures people into a false sense of hope and stokes the fear that if they don’t win, they will never get ahead.

Lotteries were once considered a harmless way for governments to raise money for social safety nets. In the immediate postwar period, many people saw them as a painless alternative to taxes, an arrangement that would enable states to expand their social services without imposing onerous burdens on middle- and working-class families.

But as state budgets have become more stretched, people are taking a harder look at the cost of lottery play. They’re figuring out that the jackpots aren’t as large as they once were, and that the winnings may not be what you expect. The lottery is a big industry, and the people who play it are a diverse group. But it’s dominated by lower-income and less educated people, who tend to spend more on tickets than others.

It is also worth remembering that lottery winners don’t actually receive their winnings in cash. The advertised jackpots, such as the $1.765 billion Powerball prize, are calculated based on how much you’d get if the current pool were invested in an annuity over 30 years. You’d receive a lump sum at the time of the drawing, followed by 29 annual payments that increase each year by 5%. If you die before all the payments are made, the remaining value will be passed on to your heirs.

The word lottery comes from the Dutch noun lot, meaning fate. Its root is Old English hlutr, which means what falls to you by chance (anything from dice to straw or a chip of wood with your name written on it). The practice of determining the distribution of property and slaves by lot goes back thousands of years. The biblical book of Numbers includes a story about Moses instructing the Israelites to divide their land by lot. And the Roman emperors used lotteries to award land and goods to their guests at Saturnalian feasts.

In recent years, lottery commissions have been trying to deflect criticism by framing the game as fun and family-friendly. It’s a message designed to obscure the regressivity of the lottery and to downplay the fact that it’s a form of gambling that encourages people to spend more than they can afford. But the lottery is still a dangerous and expensive game, and its players should take care to weigh their choices carefully.