Public Services and the Lottery


A lottery is a scheme for distributing prizes by chance. Drawing lots to determine ownership or other rights has a long history, including several instances in the Bible. The modern lottery has become a popular source of state funding for public services, such as education, and for a variety of other purposes. Lotteries are legal in 37 states and the District of Columbia.

Lottery profits are derived from the sale of tickets and the distribution of prizes. Normally, a substantial portion of the proceeds is used for costs associated with organizing and promoting the lottery. A smaller proportion is allocated to winnings, and the rest is distributed as profits to the sponsors. A common feature of modern lotteries is the use of a computer program to select winning numbers.

The popularity of the lottery depends on the degree to which the public views the profits as benefiting a desirable public service, such as education. It also depends on the extent to which lottery supporters argue that a state’s current fiscal situation makes it especially receptive to lottery adoption. However, studies show that the state’s objective fiscal position has little bearing on whether or when a lottery is adopted.

Historically, the majority of lottery profits have gone to education, although some go to other public services and to promote the game. Some have been devoted to public works projects, such as paving streets or building wharves. Others have been dedicated to charitable causes. In colonial era America, the lottery helped finance the Jamestown settlement, and George Washington sponsored a lottery to fund a road across the Blue Ridge Mountains.

In recent years, the lottery has expanded its offerings to include games like video poker and keno. Many of these new games are available in places where traditional lotteries are not, including convenience stores and restaurants. This trend has fueled debates about whether lotteries are harmful to society, and about the effects of compulsive gambling.

In 2003, there were about 186,000 retailers selling lottery tickets in the United States. Most sell lottery tickets in shopping malls and convenience stores, but some sell them in other types of shops, including nonprofit organizations (churches and fraternal organizations), service stations, restaurants and bars, and bowling alleys. Approximately three-fourths of all retailers offer online lottery sales. A small number of retailers specialize in selling only lottery products. The largest retail outlet is a chain store called Wal-Mart. It sold approximately 17 million tickets in 2003. The National Association of State Lottery Licensing (NASPL) tracks sales in the United States and Puerto Rico. Most of the other major lotteries in North America have a similar data system. They report their ticket sales to NASPL on a quarterly basis. The NASPL data includes the total number of tickets sold as well as sales per retailer and by state. The figures exclude sales of scratch-off tickets. The NASPL Web site provides a breakdown of the number of tickets sold by category, including the number of players and the average purchase per player.