What is a Lottery?


A lottery is an arrangement in which prizes are awarded by a process that depends wholly on chance. In most states, the prize money is a percentage of the pool of proceeds from ticket sales after all expenses (including profits for the promoter and costs of promotion) have been deducted.

Lottery games have long been a popular source of state revenue. They are generally endorsed by politicians as a means of raising money for a specific public good, such as education. The prevailing view is that by providing an opportunity for people to voluntarily spend their money, the lottery reduces the pressure on the general population to pay taxes for the same purpose.

As the popularity of lotteries has grown, state governments have sought to increase their share of these proceeds. They have created a variety of lottery formats, including daily numbers games, scratch-off tickets, and the state-wide Powerball game. Regardless of the format, these lotteries all operate in similar ways. Each state legislates a monopoly for itself; establishes a state agency or public corporation to manage the lottery; begins operations with a modest number of relatively simple games and, under constant pressure for additional revenues, progressively expands the scope and complexity of their offerings.

Lottery participants as a group contribute billions of dollars to government receipts that could otherwise be used for such purposes as education, roads and bridges, health care, and social safety net programs. They also divert savings that could have gone toward retirement, home ownership, or college tuition. Despite the high prize payouts, the lottery is not a prudent investment for most people.