A lottery is an arrangement in which the allocation of prizes depends on chance. Prizes may be money, goods, services, or other rewards. The term is also used to refer to the allocation of other resources, such as jobs, school places, or public housing units.
The casting of lots to make decisions or determine fate has a long history, including several instances in the Bible. However, the use of lotteries for material gain is more recent. The first state-run lotteries were established in the 16th century to raise funds for public projects, such as town fortifications, or to help the poor. The Dutch state-owned Staatsloterij is the oldest still running lottery (established in 1726).
Lotteries usually consist of a pool or collection of tickets, each bearing numbers or symbols, and a mechanism for selecting winners. The selection process is usually random, such as shaking or tossing, and sometimes uses computers to generate a series of randomized numbers or symbols. The numbers or symbols are then extracted from the ticket pool by a drawing. The prize amount is awarded to those whose numbers or symbols are drawn. In the United States, winners can choose between receiving an annuity payment or a one-time lump sum payment of the advertised prize. In either case, the prize is subject to income tax.
Although the popularity of lotteries is widespread, they have not been universally approved. Many critics believe that lotteries promote gambling and prey on economically disadvantaged individuals, particularly young people. Other critics believe that the public’s fondness for lotteries is a form of coerced or unearned consumption, which is not a desirable way to fund government.
Lottery proponents have argued that the proceeds are used for a “public good,” and this argument has proved effective in winning public support. Studies have shown, however, that the popularity of a lottery is independent of a state’s objective fiscal circumstances.
Unlike private lotteries, which have a narrow focus and limited scope, state-run lotteries operate on the broadest possible basis. This has led to a great deal of experimentation with games and strategies, as well as aggressive promotion. The success of a lottery depends on the degree to which it captures the public’s imagination and engenders a sense of loyalty among specific constituencies, such as convenience store owners (the usual vendors for lotteries); suppliers of lottery equipment or machinery (heavy contributions by these entities to state political campaigns are frequently reported); teachers (in states where the proceeds from a lottery are earmarked for education); and, in some cases, state legislators (who become accustomed to receiving substantial campaign contributions from lottery suppliers). All of these factors have contributed to the continuing evolution of the lottery. For example, recent research has indicated that the number of lottery participants is increasing rapidly. It is estimated that more than half of the adult population has purchased a ticket in the past 12 months. This has stimulated a surge in advertising and the development of new games such as keno.
