What is a Lottery?


A lottery is a game of chance in which tickets are sold for a prize, usually money. Some governments prohibit it, while others endorse it to the extent of organizing a national or state lottery. In 2002, thirty-nine states and the District of Columbia reaped over $42 billion in lottery revenues. Supporters promote it as a simple revenue-raiser and a painless alternative to higher taxes, while critics decry it as dishonest, unseemly, and regressive on the poor.

The word lottery is derived from the Dutch noun lot, meaning fate or fates, and may be a calque of Middle Dutch loterie “action of drawing lots.” The first recorded lotteries took place in the Low Countries in the 15th century to raise money for town fortifications and help the poor. Privately organized lotteries became common in colonial era America for financing public works projects such as paving streets, building wharves, and constructing churches. Benjamin Franklin sponsored a lottery to raise funds for cannons during the American Revolution, and George Washington attempted to hold a lottery in 1768 to relieve his crushing debts.

In modern times, lotteries are used for military conscription, commercial promotions in which property is given away through a random procedure, and the selection of jury members from lists of registered voters. The strict definition of a gambling type lottery requires payment of something of value (usually money) in exchange for a chance to receive a prize, but the overwhelming majority of state-sponsored lotteries do not meet this standard.

The lottery is also a classic example of a policy that is made piecemeal and incrementally, with little or no general overview. As a result, the industry is influenced by a combination of market forces and political pressures that are not reflected in government legislation or regulation. This has often led to a fragmented system of oversight in which lottery officials are accountable to a variety of agencies and are subject to constant change and evolution in the course of their work. This also limits the ability of lottery officials to make policy decisions that have broad, long-term implications for the industry. This has led to a number of problems, including compulsive gambling and the regressive impact on lower-income groups. In response, many states are seeking to diversify their offerings to include games such as keno and video poker. Several are also attempting to increase prize payouts and improve advertising campaigns to compete with online casinos. Whether these moves are sufficient to address the current problem remains to be seen. However, some states have already started to see their revenue growth plateau, which may lead them to look for new ways of increasing revenues in the future.