What is a Lottery?

Lottery is a scheme for raising money by selling chances to share in a distribution of prizes. Usually the term refers to a gaming scheme in which tickets bearing particular numbers draw prizes while the others are blanks. The prizes are then allocated by chance to those who have purchased tickets. The word is also used figuratively to mean any arrangement in which the allocation of some portion of something depends on chance, as in the case of marriage or business ventures.

The earliest known lotteries were public games of chance to raise funds for towns, such as the one in the 15th century at L’Ecluse to build walls and town fortifications. The lottery of the American Revolution was sponsored by Benjamin Franklin to raise funds for cannons to defend Philadelphia against British attack. The first state lotteries were similar to traditional raffles, with people buying tickets for a drawing at some future date. But innovations in the 1970s turned lotteries into a more dynamic industry. These included the introduction of instant games, which allow buyers to immediately collect winnings, and the use of annuity payments for winners rather than lump sums, which require recipients to spend the entire amount at once and can lead to a rapid deterioration in financial security.

The evolution of state lotteries has been a classic example of a government enterprise at cross-purposes with its public mission. While public officials are required to make decisions on a day-to-day basis in the interest of maximizing revenue, the very process of running the lottery is likely to lead to problems for the poor and compulsive gamblers, among other groups.