Since New Hampshire became the first state to establish a lottery in 1964, states have been rolling out new games with bigger jackpots to keep their gamblers interested. It seems that the elusive dream of winning the lottery, however improbable, continues to attract people who otherwise would not gamble or even think about it. Billboards on the highway hypnotically promise massive pay-outs in exchange for a tiny investment. Many people feel that a lottery ticket is the only way they can get up from their current financial straits.
While casting lots for decisions and determining fates has a long history, the modern lottery has its origins in 1612 when the English colony of Virginia held a lottery to raise money for public works projects. A few decades later, anti-tax movements led many legislators to adopt lotteries as a relatively painless source of revenue.
State governments claim that lotteries are a great way to increase revenue and fund programs such as senior services, environmental protection, and education. Critics argue that, whatever the benefits, lotteries are regressive taxes on lower incomes and encourage addictive gambling behavior. They are also seen as a significant source of illegal gambling, and they place state government in an inherent conflict between the desire to increase revenues and its duty to protect public welfare.
Most state lotteries were historically little more than traditional raffles, with participants purchasing tickets for a drawing at some future date, often weeks or months away. Lottery innovations in the 1970s transformed the industry, though. The introduction of scratch-off tickets allowed the state to offer smaller prizes with much higher odds – on the order of one in a hundred. These tickets were more attractive to low-income people who typically have less disposable income and lower tolerance for risk.
These innovations were successful, and scratch-offs now account for a substantial portion of total lottery sales. In addition, the growth of Internet technology has enabled lottery systems to expand their reach globally. As a result, state lotteries now operate in more than 30 countries worldwide.
Although the majority of people who play the lottery do so for entertainment, some believe that it is their only hope of making a better life. Regardless of the reason, it is important to understand that there are no guarantees in the game of chance. The likelihood of winning the lottery is extremely low, so it should not be viewed as an investment opportunity.
While there are some people who can win big, most of us will end up losing more than we gain. It is better to save the money spent on lottery tickets and invest it in an emergency savings fund or paying off credit card debt instead. Brian Martucci is a writer for Money Crashers and is committed to helping consumers save time, money and stress by researching the best time and money-saving strategies. He covers credit cards, banking, insurance, travel, and more. For more tips, visit his website at www.moneycrashers.com.
