In 2021, people in the US spent upward of $100 billion on lottery tickets, making it the nation’s most popular form of gambling. Despite its popularity, lottery games have not been without their critics. Some of those critics have argued that lotteries are addictive, and can have devastating consequences for players and their families. Others have questioned the value of using the lottery to raise state revenue, given that it usually comes with substantial administrative costs and diminishes the amount of money available for other public purposes. This article examines these issues.
A lottery is a game in which prizes are awarded according to a random process. Prizes may be cash or goods or services. Some states require a percentage of ticket sales to be used to support public programs. The percentage varies from state to state, as does the size of the top prize. Lottery winners may also be required to pay income and other taxes.
The word lottery is derived from the Middle Dutch noun lot, meaning “fate” or “luck.” It is probably related to Middle French loterie, which was itself a calque of Old English lotterie, meaning “action of drawing lots.” The first state-sponsored lotteries began in Europe in the early 15th century.
During the late 1980s, sixteen states (Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Montana, North Dakota, Oregon, Pennsylvania, South Carolina, and Washington) started lotteries, and another five states joined in the 1990s (Georgia, Louisiana, Minnesota, Nebraska, and Texas). The District of Columbia also had a lottery in the mid-1990s. These lotteries are often marketed as ways to raise money for education, health, social welfare, and other public purposes.
While the odds of winning a lottery prize are slim, some people become addicted to playing. Studies have shown that even a small amount of lottery play can lead to a downward spiral in family finances. Those who play frequently are also more likely to be poor and unemployed, and have lower educational achievement than their non-playing peers.
In addition to the monetary prizes offered by state-sponsored lotteries, private companies may promote scratch games that offer a variety of merchandise, sports memorabilia, vacations, and other items. In the United States, the top prize in a scratch game is often hundreds of thousands of dollars. A second type of lottery, the instant game, offers prizes such as gas cards and cash.
Lottery prizes can be very large, but the total cost of organizing and promoting a lottery is also considerable. A percentage of total ticket sales normally goes to administrative and marketing costs, and a smaller percentage is paid out in prizes.
The winners of a lottery are selected by a random drawing of tickets or counterfoils. To ensure that the selection is fair, the tickets or counterfoils must be thoroughly mixed by some mechanical means such as shaking or tossing, and then drawn at random. Computers are increasingly used to do this. The name of the lottery is sometimes used figuratively to refer to any event or activity that seems to be determined by chance: “Life is a lottery.” (From Webster’s New World College Dictionary, Fourth Edition, Houghton Mifflin Harcourt, 2010)