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Lotteries are essentially state-sponsored gambling games in which numbers are drawn for a prize, usually cash or goods. Typically, the prize is a percentage of the total amount of money or tickets sold. In the United States, the states have various options to run a lottery, including selling tickets in stores, online, over the telephone, and at banks, credit unions, and other financial institutions.
In addition to being fun and entertaining, lottery games are often seen as a way for governments to avoid raising taxes. Lottery profits are a sort of “budgetary miracle, the chance for states to make revenue appear seemingly out of thin air,” writes Cohen. This was especially true during the heyday of the state lotteries in the late nineteenth and early twentieth centuries, when politicians were worried about voters punishing them at the polls for increasing sales or income taxes.
The first recorded lotteries to offer prizes in the form of money began in the Low Countries in the fifteenth century, where towns drew lots for everything from town fortifications to helping poor citizens. The practice was also popular in England, where the earliest lotteries were chartered to raise money for war efforts and charity. By 1800, the same moral sensibilities that eventually led to prohibition had begun turning against gambling, and it was a short jump to making it illegal for states to organize lotteries.