The Lottery, Or Official Lottery, is a Major Source of Revenue For States and Other Entities

The lottery, or official lottery, is a system in which numbers are drawn for prizes. The first lotteries were probably organized in the Roman Empire as an amusement at dinner parties, with ticket holders assured of winning something. The modern practice is traceable to the fifteenth century, when towns in the Low Countries started holding public lotteries to raise funds for town fortifications and to help poor people. Lotteries usually consist of a series of tickets, each with a unique number or symbol, which are deposited with the lottery organization for shuffling and selection in a drawing. Alternatively, the bettor may buy a receipt that is redeemed later for a specific prize.

Among the early critics of state-sponsored lotteries were devout Protestants, who viewed them as morally unconscionable. But a general antipathy to taxation made state lotteries appealing, and they quickly raised enough money to fund everything from civil defense to the construction of churches. Harvard, Yale, and Princeton were founded partly with lottery funds, and the Continental Congress tried to use one to finance the Revolutionary War.

Today, the official lottery is a major source of revenue for states and other entities. It offers a variety of games, including instant tickets (known as scratch-offs) and video lottery terminals. Some states offer keno, and some even run bingo games. While the prizes can be very large, the average winning ticket is worth just a little over a dollar. This is in part because of the inefficient collection process—only about 40 percent of each lottery dollar actually goes to the state. And, in any event, a lotteries’ share of state budgets is tiny compared to the total amount that governments collect through taxes.