Lottery is a game in which numbers are drawn at random to determine winners. The word lottery derives from the Middle Dutch term loterie, which means “action of drawing lots.” Lotteries are often organized by government agencies as a form of public funding, with proceeds used for a variety of purposes, including construction and maintenance of roads and bridges, building schools, and providing charitable assistance.
Prizes range from a few thousand to many millions of dollars. Lotteries must balance the desires of potential bettors for large prizes with the cost and administrative burden associated with arranging them. In most cases, a portion of the money pooled for a prize is used to cover costs and profits to organizers (who also collect and bank the ticket sales), with a proportional share left over for the winners. In some cultures, people prefer to bet on fewer larger prizes than a lot of smaller ones.
The first state-run lotteries emerged in the fourteenth century, in the Low Countries. By the seventeenth century, the practice had spread to England, where it was adopted for a variety of public works projects. It was also popular during the Roman Saturnalia, when tickets could be bought for parties and other events, or as a divining tool (Nero was known to love his lotteries).
In 1964, New Hampshire became the first state to establish a modern state-run lottery. Its advocates argued that, by generating revenue from a voluntary exercise of chance, a lottery would allow states to expand their social safety nets without offending an anti-tax electorate. The argument resonated, particularly in the Northeast and Rust Belt, where many voters were accustomed to paying no taxes at all.
As the lottery became increasingly accepted, debate and criticism shifted away from whether or not it was a desirable policy to more specific features of its operations, including how it benefited certain constituencies. For example, convenience store owners developed extensive business ties with lottery suppliers, and they often contribute heavily to the political campaigns of state legislators who favor the industry. Lottery critics have also focused on the risk that compulsive gamblers might be swept up in the promotional machinery of a state-run lottery, or on the regressive impact on lower-income groups, or on other concerns about the social implications of a gambling enterprise.
By the 1980s, when states were grappling with an anti-tax revolt, it became impossible to argue that a lottery would finance most of a state budget. As a result, lottery advocates began to pitch the idea as a way to fund a single line item in the budget—typically education but sometimes elder care, parks, or aid for veterans. This narrower approach was easier to sell to voters. It also made it possible to campaign for legalization by arguing that a vote in favor of the lottery was a vote against cutting the budget in other areas. Despite these limitations, the modern lottery has survived and continues to grow.