The Official Lottery

The official lottery is the system through which the state raises funds through games of chance. Lottery operations are governed by state laws. These laws specify, among other things: the operation and accounting of the games; distribution of proceeds; activities considered illegal (such as selling tickets to minors); and time limits for claiming prizes.

States began to adopt lotteries in the immediate post-World War II period. Politicians hoped to find ways to maintain government services without raising taxes and without enraging an increasingly hostile electorate. Lotteries appealed because they offered a way for governments to get revenue from people who were voluntarily spending their own money instead of being forced to pay through taxes.

Initially, the vast majority of lotteries were based on traditional raffles, with players purchasing a ticket that would be drawn at some point in the future. However, innovations in the 1970s dramatically changed the nature of state lotteries. Suddenly, games such as instant-win scratch-off tickets were available. These had lower prize amounts but higher odds of winning and generated revenue much more quickly than the old-fashioned raffles.

Despite the fact that state lotteries are very profitable, they are criticized for their alleged regressive impact on low-income residents. One argument that a lottery’s supporters make is that gambling is inevitable, so the state might as well capture it through a sanctioned game and put the proceeds toward public goods such as education. However, this argument ignores the fact that most of the people who play the lottery are not poor. In addition, it does not address the fact that a disproportionate amount of the revenue generated by lottery games comes from middle-income neighborhoods.