What is a Lottery?

A lottery is a game in which numbers are drawn for prizes. Some examples include a lottery for units in a subsidized housing block or kindergarten placements at a reputable public school. Another popular form of the lottery is the financial lottery, in which players pay for a ticket, select a group of numbers, or have machines randomly spit them out, and win prizes if enough of their numbers match those that are randomly spit out by a machine.

While making decisions and determining fates by casting lots has a long record in human history (with at least two instances in the Bible), the modern state lottery is relatively new, with its first successful establishment occurring only in New Hampshire in 1964. Since that time, nearly every state has established a lottery, and the resulting lotteries have evolved in similar ways: the state legislates a monopoly; establishes a state agency or public corporation to run it (rather than licensing a private firm in return for a portion of the profits); begins operations with modest numbers of relatively simple games; and, as pressure for additional revenues mounts, progressively expands its offerings.

As lottery officials seek to maximize revenue, they must decide how many prizes to offer, what percentage of the total pool to reserve for costs, promotions, and administrative expenses, and what proportion of the remaining prize money to distribute among the winners. This balance is affected by the number of large, attention-grabbing jackpots, as well as the relative popularity of smaller-value games. The latter are often popular because of the opportunity to earn free publicity on news sites and TV broadcasts. Super-sized jackpots, on the other hand, help drive ticket sales by promising to provide large sums that can make a real difference in people’s lives.

Lottery games also tend to develop extensive specific constituencies, including convenience store operators, which typically sell the tickets; suppliers of equipment, services, and advertising; teachers in states where lottery revenue is earmarked for education; and state legislators, who quickly become accustomed to the additional revenues. The result is that while the objective fiscal circumstances of a state may influence whether or not it adopts a lottery, once one has been established, its public support is quite durable.

Lottery games have gained broad public acceptance, in part because of their reputation as a painless form of taxation. This claim is particularly effective when states need to raise additional funds for specific purposes. The term lottery is derived from the Dutch noun lot, meaning “fate” or “fate,” and it became popular in English during the 17th century as a name for state-sponsored gambling. The word has since spread to many countries, and the oldest running lottery is the Staatsloterij of the Netherlands.