A lottery is a form of gambling in which people pay for the opportunity to win a prize. Prizes can range from cash to valuable items like automobiles and jewelry. Federal statutes prohibit, among other things, the mailing in interstate or foreign commerce of promotions for lotteries and the shipment in interstate or foreign commerce of lottery tickets themselves. State laws and regulations establish procedures for conducting the lotteries, and public officials play a key role in developing and overseeing them. The emergence of lotteries has been accompanied by intense debate about the merits and risks of such arrangements.
The word “lottery” derives from Middle Dutch loterie, a diminutive of the verb lot (“to choose by chance”) and may be related to Old English “lotinge.” It is commonly believed that the first state-sponsored lottery was established in the Netherlands in 1569. Several states have followed suit since then, and the operations of the national lotteries now are almost entirely regulated by state law.
In most cases, a state adopts a lottery to augment its general revenue base. Lottery proceeds have become a major source of funds for education and other programs in the United States, and there is no question that they have broad popular support. Nevertheless, the dynamics that drive state lotteries are complex. Lottery proponents argue that the games are a painless way for citizens to contribute to government spending and avoid the need to raise taxes or reduce programs. Unlike the income tax, lottery revenues are voluntarily spent by the players rather than extracted from them by force.
Lottery critics are concerned that the proceeds are a disguised tax on those least likely to be able to afford it. Numerous studies show that low-income people play the lottery at a much higher rate than people from other income levels. These figures are of particular concern to people who advocate stricter gambling regulation.
While the controversies surrounding lotteries vary from state to state, they are generally similar. The states adopt the game, legislate a monopoly for themselves (or create a quasi-monopoly in the case of private firms that contract with the states to run the lottery), begin operations with a modest number of relatively simple games, and then, under pressure to generate more revenues, gradually expand their offerings.
State legislators and voters are often swept up in the excitement of the new lottery. But the evolution of state lotteries has also exemplified a pattern in which policy decisions are made piecemeal and incrementally, with few overall guidelines. As a result, the lottery has become a classic example of a government function operating at cross-purposes with the public interest.