The History of the Lottery

The lottery is a way for states to raise large amounts of money without raising taxes. It draws on a universal human appetite for risk, offering a chance to win big money—money that would make a lot of people rich—for the price of a ticket or two. Lottery ads play up this appeal, luring consumers with promises of instant riches and promising the “freedom” that money brings. These ads are effective: in surveys, a majority of lottery players say that they play regularly.

In the beginning, state lotteries were essentially traditional raffles: People bought tickets in advance of a drawing at some time in the future. Then innovations occurred, particularly in the 1970s. By that time, the lottery had become a major industry, and revenues expanded rapidly. During this period, state lotteries introduced new games (including scratch-off tickets), increased advertising expenditures, and promoted themselves more aggressively.

While the casting of lots to determine ownership or other rights has a long record in human history, state-sponsored lotteries were first tied directly to the United States in 1612. Lottery winners receive prizes in the form of cash or merchandise. The prize amounts vary from one state to another, but the average is in the thousands of dollars.

In the United States, most of the money won in a lottery is paid out over a 20-year period and is subject to inflation and taxation. This erodes the value of winnings, even though some people win multimillion-dollar jackpots.