A lottery is a form of decision making that distributes a prize to a subset of the larger group, using a random process. It is a method of picking employees from a large pool, placing players on sports teams, choosing participants in a public event and more. The advantage of a lottery is that it is fair to all people involved, as the winner’s success depends only on luck. In fact, it is the only method that satisfies all the criteria of fairness: a person’s chance of winning does not depend on his or her social status.
In the beginning, lotteries were, as Cohen writes, “budgetary miracles, the chance for states to make revenue appear seemingly out of thin air.” As America became richer, however, its social safety net eroded, and balancing budgets became increasingly difficult. Government officials could raise taxes or cut services, but both options were unpopular with voters. So, as the nineteen-seventies rolled around, many states began to introduce lotteries.
As a result, Americans’ obsession with the possibility of winning a huge jackpot has coincided with a decline in financial security for most working people. The gap between rich and poor has widened, job security has vanished, health-care costs have skyrocketed, and the old promise that hard work would render you better off than your parents has become a distant dream.
Some economists have argued that state-run lotteries prey on the economically disadvantaged, offering a false hope of instant riches. But other scholars have focused on the positive impact that lotteries can have. They can help disadvantaged people get ahead by providing them with financial knowledge and a tool for achieving their goals. Nevertheless, there are still many lottery winners who have gone bankrupt soon after their big win or have spent all of their prize money on unnecessary things like huge houses and Porsches. One of the reasons for that is that it’s very easy to lose control of a sudden windfall, and this is why most lottery winners fail to manage their winnings well.