What is a Lottery?

A lottery is a form of gambling in which numbers are drawn at random and winners receive prizes, such as cash or goods. It is often a legalized way to raise money for public or private uses, such as building a road or paying for college scholarships.

A state legislature usually establishes a lottery by law, creating a monopoly for itself and setting up a government agency or public corporation to run it (as opposed to licensing a private firm in return for a share of profits). Lottery commissions typically begin operations with a modest number of relatively simple games and, due to constant pressure for additional revenues, progressively expand the lottery in size and complexity, particularly in the form of adding new games.

States’ need for revenue was the motivation that drove them to enact state-sponsored lotteries. But it also reflects a belief that people will always gamble, so the state might as well offer them the opportunity to do so in exchange for tax dollars. This thinking explains why state lotteries have been a longstanding fixture in American life and why they have never been abolished.

The problem with this arrangement is that it relies heavily on a relatively small group of very dedicated lottery players for a big part of its revenues. Those “super users,” as the Pew Charitable Trusts calls them, can account for up to half or more of the overall ticket sales. The remainder of the funds gets sunk into administrative costs and vendor fees, and toward whatever projects each state designates.