The History of the Lottery

A lottery is a form of gambling in which numbers are drawn to determine a prize, often money. A wide range of lotteries exist, including state-run ones that award large sums of money and others that raise funds for public projects such as building the British Museum or repairing roads.

Lotteries have broad public support, and many people play them regularly. But their odds of winning are extremely slim, and those who do win face enormous tax bills and a loss of purchasing power over time (the infamous “lottery windfall” effect). The vast majority of people who buy lottery tickets lose them. This is true even when the prizes are high.

Despite their broad public appeal, lottery games are often run by private interests that benefit from the monopoly granted to them by state governments. This is especially true of state-run lotteries, which have developed extensive and specialized constituencies. These include convenience store operators; lottery suppliers (with heavy contributions to state political campaigns reported); teachers in states where the proceeds are earmarked for education; state legislators (who quickly become accustomed to the extra revenue); and, of course, the state officials who oversee the operation.

This is a classic example of how a government’s policy decisions can be overtaken by the ongoing evolution of an industry. The history of lottery shows that once a lottery is established, the state typically legislates a monopoly for itself; establishes a publicly owned public corporation to run it; begins operations with a small number of relatively simple games; and then, under constant pressure for additional revenues, progressively expands its offerings, particularly through new games such as keno and video poker.