What is a Lottery?
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Lottery is a type of competition in which tokens are distributed or sold and one or more prizes are allocated to the winners by drawing lots. In the simplest form, the prize is cash; in more complex forms, it can be goods or services. The term lottery is also used to describe contests in which tokens are withdrawn from a larger group, such as applicants for a job or competitors in a sporting event.
A number of important issues arise in the operation and regulation of state-sponsored lotteries, especially as they are marketed. Most states adopt lotteries primarily to raise revenue for specified uses, often education, but they are also viewed as a painless form of taxation. As a result, they typically enjoy broad public support. Moreover, they usually attract many specific constituencies, including convenience store operators (to whom the proceeds are often a significant source of revenues); lottery suppliers (who frequently make heavy contributions to state political campaigns); teachers (in states where the money is earmarked for them); and state legislators (who often benefit from the increased revenue).
The word lottery comes from the Dutch noun lot, meaning “fate.” The practice of holding lotteries is ancient; it is mentioned in many historic documents, including the Bible, and it was widely used in colonial America to raise funds for townships, wars, colleges, and even public works projects. Lotteries were especially popular in the 17th century, when they helped finance the early English colonies.
Among the most prominent supporters of state lotteries in recent decades has been a coalition of groups representing business, labor, and religious interests. The coalition has argued that the lotteries increase employment opportunities, stimulate the economy, and provide a safe alternative to gambling and vice. In addition, the coalition has emphasized that the proceeds are used for public purposes and not to profit private corporations. The coalition’s success has been remarkable. Despite the opposition of the religious and social conservatives, its members have been able to successfully advocate the adoption of state lotteries in nearly every state.
In most cases, a state lottery operates as a monopoly, with no competition from commercial lotteries. The profits are used solely for the specified uses in which they are earmarked, and tickets can be purchased by any adult physically present in the state. In the United States, these state-run lotteries are governed by laws that create an agency within the government to administer the lottery and set rules governing its operations.
State-sponsored lotteries generally begin by sponsoring a small number of relatively simple games. They then promote the games to attract players and maximize revenues. Initially, they generate considerable initial revenues, but these typically peak and then decline. To sustain revenues, lotteries must introduce new games. This is an inherently risky proposition, since the games must be sufficiently attractive to attract new participants while at the same time not so attractive that current participants become bored with them and stop playing.