New York’s Official Lottery

Lottery, procedure for distributing money or prizes (such as cars and houses) among a group of people by drawing lots, or in other words, chance. State-run lotteries are generally regulated and operated by laws governing the operation, accounting, distribution of profits, time limits for claiming prizes and activities considered illegal.

New York’s official lottery is the largest in North America, with $3 billion earmarked for education each year. It was also one of the first government-run lotteries in the country, opening in 1967. And its jackpots are enormous – in fact, you could win millions with just five numbers.

Super-sized jackpots drive lottery sales, of course. And they earn a windfall of free publicity on news sites and broadcasts. But these giant prizes don’t always translate into real public services.

A large share of the money is collected inefficiently, and ends up being a drop in the bucket for actual state governments. By some estimates, lottery proceeds amount to just 1 or 2 percent of overall state revenue.

In the immediate postwar period, states faced the daunting task of maintaining their social safety nets without raising taxes. Cohen argues that, for these politicians, lotteries seemed like “budgetary miracles,” the opportunity to create revenue from thin air – and avoid being punished at the polls if they raised taxes. This argument may have been a little bit of a stretch, but it resonated. New Hampshire, famously tax-averse, approved the first modern state lottery in 1964, and thirteen more followed suit.