In the fourteenth century, people began to draw lots for everything from land ownership to slaves. The practice grew into the lottery, which in modern times is a state-run game that offers a fixed prize pool for winners. A percentage of this money goes to expenses like promoting the games and paying out prizes. The rest is typically distributed in the form of annuities, which pay out a large sum when you win and then 29 annual payments that grow each year by 5%, until they are finally paid off.
The lottery became popular in the early American colonies because it was a way to raise funds for projects without hiking taxes, which could be political suicide. It was also a rare point of agreement between Thomas Jefferson, who saw it as not much riskier than farming, and Alexander Hamilton, who grasped what would become the essential point of lotteries: that people would prefer a small chance at a large jackpot to a larger chance at a smaller one.
But the national obsession with multimillion-dollar jackpots coincided with the slackening of financial security for most Americans. The gap between the rich and poor widened; job security, pensions, and health-care costs rose; and the long-held national promise that hard work and education would enable children to do better than their parents eroded. Against this backdrop, state lotteries seemed like budgetary miracles. They were a way for politicians to maintain existing services without raising taxes and, Cohen argues, to avoid being punished at the polls.