How Lottery Commissions Make the Lottery Look Bigger


The lottery is a type of gambling in which tokens are sold and a prize awarded according to a random drawing. The term originates from the Dutch word lot (“fate”), a calque of Middle French loterie “action of drawing lots” (OED). The first state-sponsored lotteries in Europe were recorded in the Low Countries in the early 15th century for raising funds to build town fortifications and to help the poor.

Purchasing a lottery ticket could be a rational decision for an individual in some cases. The entertainment value of a winning ticket and the non-monetary benefits could outweigh the disutility of the monetary loss from losing the ticket. However, this argument is flawed because the expected utility from winning a lottery is rarely as high as advertised or even close to it.

Lottery commissions know this and have shifted away from telling people to play because it is fun. They instead rely on the message that it is a good thing because it raises money for states. This is a falsehood because the percentage of lottery revenue that goes to state coffers is actually lower than what most states receive from legal sports betting.

One way that lottery commissions can increase ticket sales is by making the top prize appear to be much larger than it really is. This draws in new customers and also earns them a windfall of free publicity on news websites and television. This is the same tactic used in many other types of gambling and explains why so few people actually win large sums of money.