Lottery is an arrangement for awarding prizes to one or more individuals by a process that relies wholly on chance. Prizes are often cash or goods. The lottery is most often organized by a government, but private companies also may organize lotteries for their own profit.
The drawing of lots to determine ownership or other rights is recorded in many ancient documents, including the Old Testament and the Roman law books. The earliest known lotteries were probably dinner entertainments, in which guests took turns putting down tokens that were drawn at the end of a meal. One example dates to the Han dynasty (205–187 BC), and a similar practice was popular in ancient Rome with Saturnalian feasts, in which emperors would give away property and slaves by lot.
State lotteries were introduced in the 1960s, when governments were under pressure to expand their array of services but did not want to increase taxes on the working class and middle classes. Initially, most lotteries were small, and the prize money was relatively modest. But the success of the New Hampshire Lottery, which began in 1964, prompted other states to introduce their own lotteries, and most have since expanded the size and complexity of their operations.
Typically, a lottery prize pool is set at a fixed percentage of the total receipts. This format reduces the risk to organizers if the number of tickets sold is less than expected, but it also limits the amount of money available for prizes. The prize fund can be divided among the winners, or the winner can choose to receive a lump sum of money.
People play the lottery, even though they know that the odds of winning are long. The prize isn’t what catches them; it’s the hope that they will win. I’ve talked to people who play regularly, people who spend $50 or $100 a week, and they defy the assumptions that you might have about them: that they are irrational, that they don’t understand how the odds work.
They are clear-eyed about what the odds are, and they’ve come to a logical conclusion that this is their last or only chance to get out of their situation.
In the past, colonial America used lotteries to raise money for a wide range of public ventures, including churches, schools, libraries, canals, bridges, and towns. But after 1744, when most colonies stopped holding lotteries, their popularity waned.
Today, more than 40 states have lotteries. The laws and structures of these lotteries vary considerably, but their evolution generally follows a pattern: a state legislates a monopoly for itself; establishes a state agency or public corporation to run the lottery, rather than licensing a private firm in return for a share of the profits; starts out with a modest number of relatively simple games; and then, in response to constant pressure for additional revenues, progressively expands the variety of its offerings. The overall result is a system that has no coherent policy or vision, but which nevertheless provides substantial amounts of revenue for state governments.