A state lottery is a gambling game run by a government to raise funds for public purposes. Lottery games are regulated by the laws of each jurisdiction, and each offers unique prizes. State lottery games are usually played with numbers and the prize amounts are based on the number of tickets sold, the probability of winning, and the amount paid for each ticket. In addition, state law may prohibit certain activities such as reselling lottery tickets to minors or fraudulently claiming a prize.
The first public lotteries were probably in 15th-century Burgundy and Flanders, where towns raised money to fortify their defenses or to aid the poor. In the United States, the Continental Congress voted in 1776 to establish a lottery to support the American Revolution. Privately organized lotteries became popular in the 18th century, and they were used to finance American colleges such as Harvard, Dartmouth, Yale, William and Mary, Union, and Brown.
In the 1960s, New York voters approved a constitutional amendment that authorized a state lottery. The proceeds were to be “applied solely to, in aid of or in support of education.”
Until recently, supporters of legalized gambling could easily argue that lotteries are budget miracles, allowing states to fund services without raising taxes. Lottery critics hailed from both sides of the political aisle and all walks of life, but most of them were devout Protestants who regarded gambling as morally unconscionable.
Despite these concerns, state-sponsored lotteries have become ubiquitous. Today, according to the National Conference of State Legislatures, lottery revenue floats about one percent of state budgets. But, as Cohen explains, the hefty sums reaped by state governments are offset by two problems. First, public perceptions of how much money is spent on lottery-related programs are inflated by noisy campaigning and decades of heavy promotion. And, second, the money raised by lotteries is regressive, meaning that it takes a greater share from low-income citizens than wealthy ones.