A lottery is a scheme for the distribution of prizes by chance. In modern use, the term is usually restricted to state-sponsored gambling games in which people purchase chances on a particular outcome (often money). But there are other types of lotteries, including those that determine such things as unit assignments in subsidized housing or kindergarten placements, and commercial promotions in which property (like cars) is given away randomly to paying participants. Unlike the traditional gambling type of lottery, in which payment is made for a chance to win, all payments for chances in these non-gambling lotteries are considered tax-deductible charitable contributions.
Humans have an intuitive sense for how likely risks and rewards are within their own experiences, but those skills don’t translate well to the scope of massive lotteries. “If you really understood how rare it is to win the lottery, it’s unlikely you’d buy a ticket,” says Matheson.
Americans spend about $80 billion on tickets each year — more than the GDP of most countries. Some of that money might be better spent on emergency savings or paying off credit card debt. But the real reason people play is that they’re hooked on the fantasy of winning a jackpot big enough to change their lives. That’s why you see billboards on every highway promising a million bucks or more. But there’s a dark underbelly to the lottery: It reinforces the idea that success depends on luck and that life is basically a game with an invisible ball that rolls in your favor from time to time.