A game in which tokens are sold and prizes are awarded to the owners based on the outcome of a draw. Lotteries are often organized by states or other organizations as a means of raising funds. People also play lotteries privately, for fun or for charity. The term derives from the Old English word hlot, which means “selection by lots.” Making decisions and determining fates by casting lots has a long record in human history, with several examples in the Bible. The first recorded lottery to offer tickets for a prize of money was held in the 15th century. It was held in Bruges, in what is now Belgium, to raise money for town repairs and aid the poor.
State governments have been quick to adopt lotteries because they can be established without the state imposing a tax increase or cutting favored programs. In addition, the popularity of lotteries seems to be unrelated to the actual fiscal health of state government; as Clotfelter and Cook point out, in almost all cases that have surveyed public opinion, when a lottery is adopted it wins broad public approval, even when the state’s finances are in relatively good shape. Lottery advocates have found that they can sustain the lottery’s popularity by arguing that proceeds will be earmarked for a specific, popular government service – usually education – and thus avoid a charge of supporting gambling.
The ubiquity of lotteries has been partly explained by the fact that, since the nineteen-seventies, when life began imitating the lottery in the lives of most working Americans, there has been an obsession with unimaginable wealth. This has coincided with a widening of the income gap, an erosion of job security and pensions, increased poverty, and rising costs for health care and education. The lottery offers people the chance to escape this reality, if only for a moment.
Until the 1970s, most state lotteries were little more than traditional raffles, with the public buying tickets for a drawing at some time in the future. But innovations in the 1970s brought changes that transformed the lottery industry. Initially, these changes made it possible to sell tickets for instant games with smaller prizes that would be awarded immediately. Eventually, the public demanded larger and higher prizes. The result was that revenues expanded dramatically, and continued to grow, until boredom set in and the revenues leveled off or even declined.
To maintain the excitement and revenue growth, state lotteries have introduced a steady stream of new games. Typically, lottery officials use advertising, clever marketing, and the psychology of addiction to keep players coming back for more. These tactics are not dissimilar from those used by drug companies or video-game makers. They have proved effective, as has the strategy of selling super-sized jackpots, which are a great way to get free publicity on news sites and newscasts. The big jackpots also encourage people to buy tickets for a longer shot at the big prize, which drives sales.