The drawing of lots to determine ownership and other rights has a long record in human history (it is even mentioned in the Bible), but lottery games for material gain are more recent. The first public lotteries with tickets sold for prizes of money are recorded in the 15th century, when towns in the Low Countries raised funds to repair walls and town fortifications and to help the poor. The modern state lottery first came to the United States in 1964, when New Hampshire established one. The New York and New Jersey lotteries followed quickly, and others have since joined them. Lottery profits are devoted to a variety of purposes, including education, public works projects, and charities.
In the early days of lotteries, they were little more than traditional raffles, with participants purchasing tickets for a drawing to be held at some future date weeks or months in the future. Innovations in the 1970s introduced a wide range of new games, including scratch-off tickets and instant games. These games offered smaller prize amounts but higher odds of winning, and they became very popular. The popularity of these games, in turn, stimulated the growth of the overall lottery industry.
Most state lotteries have fairly broad public support, with many people playing at least occasionally. However, the popularity of lotteries varies by the socioeconomic status of those who play them. For example, Clotfelter and Cook note that those who buy regular state lotto tickets tend to be middle-class individuals living in suburban areas, while those who play the daily numbers games are more likely to come from lower-income neighborhoods.
Although state officials have broad authority over the operation of their lotteries, few, if any, have a coherent state gambling policy. Instead, decision making is largely piecemeal and incremental, with lottery officials relying on specific constituencies for support: convenience store operators who sell the tickets; suppliers who make heavy contributions to state political campaigns; teachers (in states where a significant share of lottery revenues is earmarked for education); state legislators (who become accustomed to the extra revenue); and the general public.
Because lotteries are run as businesses with a primary goal of maximizing revenues, they must advertise to persuade potential buyers to spend their money. This advertising raises ethical concerns about promoting gambling, especially when the profits are used for non-educational purposes and may be diverted to crime and other social problems. It also raises questions about whether the promotion of gambling is a proper function for state governments to undertake. In addition, many people object to the idea that taxpayers’ dollars are being spent on something so morally questionable.