The Evolution of the Lottery Industry

Lottery is an ancient pastime, with roots in the Roman Empire (Nero loved to play), and in biblical times, when casting lots was used for everything from who got to keep Jesus’ garments after his Crucifixion to the apportionment of land and property. Today, lotteries draw on an inextricable human urge to gamble and dangle the promise of instant riches. They also draw on people’s deepest anxieties about state spending and the distribution of wealth in a society that appears increasingly polarized, with many people in middle- and lower-income neighborhoods experiencing economic insecurity and limited social mobility.

As these concerns have grown, the popularity of lotteries has risen. In fact, the number of state-run lotteries has doubled since 1964, when New Hampshire began the modern era of such games. In addition, private lotteries now operate in every state.

The early lotteries were a bit like traditional raffles, with the public buying tickets for a future drawing that might be weeks or months away. As revenues grew, however, the industry began to innovate and the introduction of new games helped maintain or increase revenues.

In the mid-1970s, for example, lottery officials began to introduce scratch-off tickets, which offered prizes ranging from 10s to 100s of dollars with much higher odds of winning — on the order of 1 in 4. These games proved very popular and stimulated the growth of the overall lottery industry.

But a funny thing happened along the way: The public became bored with waiting for the next big jackpot, and ticket sales began to decline. The answer was to create more super-sized jackpots, which drew more attention to the game and kept revenue rising.

While super-sized jackpots do drive lottery sales, they also make it harder to win the top prize, and therefore reduce the chances of a rollover that would raise the prize to an apparently newsworthy level. And so the cycle continues: jackpots grow, players become bored, and the process begins again.

There are some who simply refuse to give up, and there are others who have figured out how to maximize their chance of winning. One example is the Michigan couple who won $27 million over nine years by bulk-buying thousands of tickets a time, and then combining them to ensure that all possible combinations were covered. Another is the Romanian-born mathematician who, after winning 14 times, shared his strategy with the world.

Lotteries have a profound impact on the economy and society, and it’s important that they be managed in a responsible manner. That means not only setting aside a proportionate share of the proceeds for education, but also ensuring that there’s enough transparency to avoid corruption and conflicts of interest. It’s a challenging task, but the future of this fascinating form of gambling is at stake. The good news is that, with the right leadership, it’s not an impossible one to achieve. The key is to set clear goals, work toward them, and never stop trying.