Lottery is a form of gambling in which participants buy tickets and then try to win prizes by matching numbers. The prize money varies, but it is usually large. Often the tickets must be printed with numbers in a predetermined pattern, but sometimes a single number can be used. The term lottery is also used to describe a process that distributes property or other rights. This may include awarding units in a housing complex, kindergarten placements, or even a person’s place in line for a job.
In the United States, all state-sponsored lotteries are legal monopolies that do not permit commercial competition, and proceeds are deposited in state coffers to fund government programs. The popularity of the games has made them a major source of income for most state governments and the federal government. In 2004 the games raised more than $120 billion. The word lottery comes from the Dutch noun lot meaning “fate” or “luck,” and the practice of drawing lots to determine ownership or other rights is recorded in many ancient documents, including the Bible. It became widespread in Europe in the 15th and 16th centuries, and it was brought to the United States in the 17th century by King James I of England for his Jamestown colony.
Several types of lottery are used in the United States, with some states offering multiple games and others running only a few. In all of them, players pay a small amount of money to purchase a ticket; then, the winnings are based on how many of the chosen numbers match those in the drawn numbers. Some states have a minimum prize amount that must be won, while others set a maximum prize.
The first modern state-sponsored lottery was established in New Hampshire in 1964, followed by New York in 1967. More than 37 states now offer a state lottery. Lottery advocates argue that the games provide state coffers with a steady stream of funds without increasing taxes. The critics point to the possible regressive impact on lower-income households and the fact that lottery advertising is directed at them.
Lottery officials promote their messages primarily by emphasizing the fact that the game is fun and easy to play. They also emphasize the percentage of lottery revenues that go to the general fund, and they encourage people to play regularly. This skewed message can obscure the fact that state lotteries are not a good way to raise public revenue, and they can be addictive.
The development of state lotteries is a classic case of how public policy is made: Decisions are made piecemeal and incrementally, with little overall overview. When the state establishes a lottery, it legislates a monopoly for itself; sets up a state agency or public corporation to run the lottery, as opposed to licensing a private company in return for a cut of the profits; begins operations with a modest number of relatively simple games; and then, due to continued pressure on the budget, progressively expands the program by adding more games and increasing the size of the prizes.