What is a Lottery?

A lottery is a method of raising funds for a government, charity, or other enterprise by selling tickets with numbers or other symbols on them that people have chosen. A drawing is then held to determine the winners. Lottery has a long history in human culture; the casting of lots to make decisions and decide fates is documented in countless instances throughout history, including several in the Bible. But the modern state-sponsored lottery, which has grown rapidly since the nineteen sixties, came into existence when growing awareness of the money to be made by gambling collided with a crisis in the financial health of many states that relied on tax revenues to support generous social safety nets.

A basic requirement of a lottery is some way to record the identities of bettors and their stakes. The bettor may write his name on a ticket that is deposited with the organization to be redeemed later or he may purchase a numbered receipt which will be included in the pool of numbers in the drawing. Normally, a large percentage of the total prize pool is deducted for costs and administrative expenses, with the remainder available to be won by bettors.

Lotteries become especially popular in times of economic stress, when they can be presented as an alternative to raising taxes or cutting social services. However, as Clotfelter and Cook report, the objective fiscal circumstances of a state do not seem to have much bearing on whether or when a lottery is introduced.