Lottery is a popular and highly profitable form of gambling. In the United States, where state governments administer the games, they generate more than $25 billion a year for public services and other purposes. Lottery revenues are far more than that of casinos or other gaming activities, and the money is derived from an extraordinarily wide base of players: 60 percent of adults in lottery-playing states report playing at least once a year. This widespread participation reflects the fundamental human impulse to play. But lotteries do a great deal more than provide an outlet for that inextricable urge to gamble: they offer the promise of instant wealth and, as such, they are a powerful force in a world of inequality and limited social mobility.
Making decisions and determining fates by the casting of lots has an ancient history (it is even mentioned in the Bible). The first public lotteries with prizes in the form of money were probably held in the Low Countries around 1466 to raise funds for town repairs and poor relief. But it was not until the early 19th century that the idea of using chance to give away public lands or other property came to America, with ten states banning lotteries between 1844 and 1859.
Once established, however, state lotteries gain broad public approval. This is largely because the proceeds are earmarked for a public purpose and not taxed directly to state coffers. The result is that a lottery is perceived to be “painless revenue,” an attractive alternative to higher taxes or cuts in other programs. It is for this reason that the popularity of a lottery seems to be independent of a state’s actual fiscal condition, and it has been shown to increase even when states are experiencing economic stress.
A state lottery’s success in winning and retaining public support is further strengthened by the way that it develops extensive and specific constituencies, ranging from convenience store operators to lottery suppliers and the teachers in those states that use lottery proceeds to fund education. In addition, lottery promotions are often backed by heavy contributions to state political campaigns.
These factors have shaped the evolution of the industry, but they have also contributed to a series of issues and criticisms that are both reactions to, and drivers of, the continuing growth of the lottery. These include concerns about compulsive gambling and a regressive impact on lower-income groups. They also involve questions about the extent to which the lottery has shifted state policies and priorities from the core functions of government.