The lottery is the procedure for distributing money or prizes among many people by drawing lots. Typically, people pay a small amount to purchase a chance to win a larger prize. The term is also used for other procedures of this type, such as military conscription and commercial promotions in which property is given away by lot, if payment of a consideration (property or money) is not required.
While Alexander Hamilton’s warnings about the lottery may have been valid, they were not enough to deter states from establishing them. Instead, state politicians, who had never wanted to raise sales or income taxes, began selling the lottery as “budgetary miracles,” the only way they could keep a full range of services running without a big increase in taxes.
Eventually, it became clear that the odds of winning a large jackpot were not important to most lottery players. What did matter was the combined utility of entertainment value and non-monetary gains, which made the tickets a rational decision for them. So the odds were lowered again and again, and as they did so, the average person’s expected utility of winning went down.
While rich people still play the lottery, they do so with much lower percentages of their income. As a result, their purchases have much less impact on the economy. So the lottery lost its appeal as a statewide silver bullet for budgetary woes, and legalization advocates changed their pitch. Instead of claiming that the lottery would float most of a state’s budget, they began arguing that it would cover a specific line item, usually education or other popular, nonpartisan services like public parks and elder care.