What is a Lottery?

The term lottery refers to an arrangement in which prizes are allocated by a process that depends wholly on chance. The prize may be money or goods. Modern lotteries of this type include the selection of jury members by random procedure, some commercial promotions in which property is given away by a process involving a raffle, and public school lotteries for athletic team rosters. In the strict sense, however, only those arrangements in which a payment is made for a chance to win constitute gambling.

Generally speaking, lotteries are designed to make money and to do so quickly. Once a state adopts a lotteries law, the decision makers must then decide how to allocate the profits among different segments of the population. Typically, this involves establishing a monopoly in the gaming industry; forming an agency or public corporation to run the lottery; starting operations with a modest number of relatively simple games; and then, under pressure from voters for increased spending, progressively expanding the lotteries through the addition of new games and the awarding of large jackpots.

While state lotteries are popular and generate substantial revenues, they also attract considerable criticism. Some of this is a reaction to the overall desirability of lottery-based gambling, but most of it is based on specific features of lotteries’ operations: for example, their perceived regressive impact on lower-income groups; their tendency to promote compulsive gamblers; and their often misleading advertising. These are all valid concerns, but they obscure the fact that lottery-based gambling is a powerful force in our economy and society.