The casting of lots has a long history in human societies, but using it for prize money is relatively new. The first public lotteries to offer prizes in the form of cash were held during the 15th century in various Low Countries towns to raise funds for town fortifications and other projects, and for aiding the poor. Today, state governments use lotteries to generate a steady stream of “painless” revenues to help offset the costs of public services without increasing taxes.
State lotteries offer a variety of games, from scratch-off tickets to daily numbers. The biggest draw is the awe-inspiring grand prize, which is promoted on TV, radio, billboards and online. Stories of previous winners, and the promise of wealth and happiness, tap into the aspirational desires of the public. “Lottery marketing campaigns expertly capitalize on the fear of missing out – FOMO,” says consumer psychologist Adam Ortman, president and founder of Kinetic319, a Denver advertising agency.
Lottery officials are under constant pressure to increase the revenue generated by their games. While this is a legitimate goal, it also presents problems for the industry. It’s often hard for legislators to balance the desire to keep lotteries popular with the need to reduce their dependence on them.
As the growth in lottery revenues slows, it becomes difficult to justify expanding into new games and raising ticket prices. At the same time, players in lower-income neighborhoods tend to participate at much smaller proportions than they do in middle-income areas. This imbalance is creating a new set of problems, including allegations that the lottery is regressive.