Social Responsibility and the Lottery


The practice of distributing goods or services through the casting of lots has a long record in human history, including the Old Testament where Moses was instructed to take a census and divide land by lot. Roman emperors used lotteries to give away property and slaves, and the lottery was an important element in colonial America when it was used to fund a variety of public works projects, including paving streets and building wharves.

In modern times, state-sponsored lotteries are one of the most popular ways for people to try their luck at winning a big jackpot. While some people may just have a natural instinct to play, most buy tickets because they feel it will be a low-cost way to increase their chances of winning a prize. The first recorded public lotteries to offer prizes in the form of money were held in the 15th century in Bruges, Ghent, and Utrecht to raise funds for town fortifications and to help the poor.

But a closer look at the math of lottery shows that most players do not maximize their utility. The monetary value of the ticket is small, and in most cases the prize amount will be less than the cost of the ticket. So why do people keep playing?

The answer is that the lottery offers a combination of entertainment and other non-monetary benefits that make it a rational choice for many. But the lottery is run as a business with an eye on maximizing revenues, and advertising necessarily focuses on persuading target audiences to spend their money on it. This can have negative consequences for the poor, problem gamblers, and other groups that might have a lower tolerance for risk, and it places the lottery at cross-purposes with its social responsibility.