The casting of lots to determine distributions of property, land, slaves, and other goods has a long history in human culture (there are at least a few instances in the Bible). More recently, governments have used lotteries for taxation and public benefits. In the United States, state-sponsored lotteries are among the most popular forms of gambling. In 2021, Americans spent over $100 billion on tickets. Lotteries are promoted by the states as a way to raise revenue for important state needs. But that message fails to mention the enormous costs of promoting the games and the trade-offs for people who spend money they could have otherwise saved.

The earliest state-sponsored lotteries were established in Europe in the late 14th century, though the term “lottery” dates from much earlier, possibly a calque on Middle Dutch loterie “action of drawing lots” or Latin lottium (“fateful or fortunate event”). Today’s lotteries are organized by private companies that promote them through advertising, and they usually feature a single large prize with many smaller ones. The value of the prizes is calculated after profits for the promoter and other expenses are deducted, although the total prize pool can also be augmented by taxes or other revenues.

Governments and licensed promoters have used lotteries for all or portions of many major projects, including the building of the British Museum, the repair of bridges, and many American colonial ventures such as a battery of guns for Philadelphia and rebuilding Faneuil Hall in Boston. The Continental Congress voted in 1776 to hold a national lottery to raise funds for the Revolutionary War, but that initiative failed to attract sufficient support. Privately sponsored lotteries continued to grow in popularity.

Critics of state-sponsored lotteries argue that they encourage addictive gambling behavior, impose a significant regressive tax on low-income individuals, and promote the exploitation of vulnerable people. They also point out that the state’s desire to increase revenues is at cross-purposes with its duty to protect the public welfare.

Despite these concerns, there are several reasons why lotteries continue to be popular. One factor is that they can appeal to a wide audience, a fact reflected in the broad public approval ratings that lotteries generally receive. This widespread approval is especially evident during times of economic stress, when the prospect of tax increases or cuts in favored programs can sour public opinion on state governments. However, studies have shown that the objective fiscal circumstances of a state do not appear to significantly affect whether or when it adopts a lottery.