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State lotteries are booming, with Americans spending more than $100 billion each year on tickets. But that wasn’t always the case. The history of state lotteries, both as gambling games and as state-sponsored fundraising tools, is a long and sometimes rocky one in the United States.
It began, Cohen writes, when growing awareness of all the money to be made in the gambling business collided with a crisis in state funding. As America entered the nineteen-sixties, population growth and inflation combined to make it more difficult for state governments to balance their budgets without raising taxes or cutting services.
The first legalized lotteries, Cohen writes, were sold on the premise that they would fill state coffers without raising state taxes, thus keeping money in average citizens’ pockets. But this promise proved to be wildly deceptive. In its first year, New Jersey’s lottery brought in only thirty-three million dollars—about two per cent of the state’s total revenue.
In an attempt to boost sales, lottery officials started offering huge jackpot prizes—like the $143 million Mega Millions jackpot in 2012. But the strategy backfired. As the size of jackpots grew, participation dropped. And even the most enthusiastic lottery participants can’t ignore a reality that’s hard to dispute: Most people don’t win.