A competition based on chance, in which numbered tickets are sold for the chance to win a prize based on a random drawing of numbers. Lottery prize money is generated from ticket sales and may be distributed as a lump sum or in annual installments.
Although the casting of lots to determine fates and property rights has a long history (including several instances in the Bible), state-run lotteries are of relatively recent origin, emerging from the immediate post-World War II period as a way for states to expand their array of social safety net services without raising general taxes. It was a remarkably successful strategy. Lotteries quickly became very popular, and in a few short decades they had become an integral part of the public landscape.
In general, state lotteries operate like businesses: they legislate a monopoly for themselves; establish a public corporation to run the lottery; begin operations with a modest number of relatively simple games; and then, driven by pressure for additional revenues, continually expand the lottery by adding new games, including keno, video poker, and other forms of gambling. This expansion has spawned significant controversy, as it is widely believed that this advertising-driven effort at maximizing revenues runs at cross-purposes with the broader public interest by, among other things, targeting poorer individuals with games they are highly likely to find addictive.
State lottery officials frequently emphasize the social-good aspects of their activities, claiming that they make a positive difference in the lives of their players and the wider community through programs such as education grants and scholarships. However, the actual evidence of this claim is scanty, at best. It is well established that most lottery players are disproportionately lower-income, less educated, and nonwhite, and that the vast majority of lotto revenue is generated from these groups.
Moreover, there is little evidence that the introduction of a state lottery changes the percentage of the population that plays other forms of gambling. Indeed, research suggests that it increases the percentage, at least temporarily. The bottom line is that, despite the claims of many state officials, the lottery does not serve the interests of the general public very well, except for the convenience store operators and lottery suppliers who provide substantial revenues to the lottery; teachers, in those states in which lottery revenues are earmarked for education; and, ultimately, politicians, who are easily seduced by this seemingly harmless source of income. A number of studies suggest that lottery revenues are a form of hidden tax on the poor. This is a serious problem that deserves a thoughtful, comprehensive response. This is not likely to come, however, as long as the lottery operates as a business and focuses on maximizing its own profits. Unless and until this is changed, the state will continue to run at cross-purposes with the public interest.