As many states look for ways to balance their budgets, one increasingly popular way is by running a lottery. Lottery revenue, a small fraction of state taxes, can provide funds for public services that otherwise would be cut. This seems like a good idea in principle, but it’s not without its problems. Among them are questions about whether government should be in the business of promoting gambling, and about how much the lottery may be contributing to compulsive gambling behavior and other forms of social harm.
In the past, governments used lotteries to fund all or part of a variety of projects, from building the British Museum and repairing bridges to financing the colonization of America and supplying Philadelphia’s defenses. But critics argue that, whatever their benefits, lotteries encourage addictive gambling behavior and are a major regressive tax on lower-income groups. They also say that the state cannot simultaneously increase revenues while reducing its responsibility for protecting the welfare of citizens.
Most state lotteries operate essentially the same way: They legislate a monopoly for themselves; set up a government agency or public corporation to run it (as opposed to licensing private firms in exchange for a share of profits); start off with a modest number of relatively simple games; and, driven by the desire for increased revenues, progressively expand the lottery through new games and features. As the number of games grows, however, so too do the odds of winning, with each new game offering lower probabilities of success than the last.
The result is that the lottery’s popularity ebbs and flows, with players drawn to the game in times of economic stress but then turning away from it as they become more concerned about losing money. Regardless of their financial condition, most lottery players are in the 21st through 60th percentiles of income distribution, meaning that they have enough discretionary income to play the game but may not have much left over to invest in entrepreneurship or innovation.
To improve their chances of winning, most players rely on tips from friends and Internet articles that claim to have the secret to picking the right numbers. The truth, says a Harvard statistics professor, is that “there are no secrets to the lottery.” The best strategy is simply to buy as many tickets as possible and choose random numbers.
Those who wish to minimize their losses and maximize their potential gains should study the history of lotteries, the math behind the game, and the psychology of chance. They should be wary of the claims that a “singleton” (a single digit appearing only once on a ticket) is an indication of a winner, or that buying more tickets increases your chances of winning. These strategies are scientifically flawed and oftentimes useless, according to a statistician who maintains a website on lottery literacy. In addition, they ignore the fact that state-sanctioned gambling is no more socially harmful than a tax on tobacco or alcohol.