The History of the Lottery

The drawing of lots to determine ownership and other rights has a long record in human history. It was used by Moses to divide land among the Israelites and by Roman emperors to give away property, slaves, and other goods. Lotteries were introduced to the United States by British colonists and later by state governments to raise funds for towns, wars, colleges, and public-works projects. They have become popular with voters and politicians alike because they are a source of “painless revenue,” that is, players spend money voluntarily to fund government services without increasing taxes on other people.

To qualify as a lottery, an event must meet at least four criteria. First, it must involve the distribution of prizes. Second, the allocation of those prizes must be based on chance. Third, the competition must have more than one stage. And finally, the prize pool must be large enough to justify a substantial amount of expenses for organizing and promoting the lottery. A percentage of the pool is normally deducted as costs and profits, leaving the remaining portion available to winners.

In the United States, nearly 186,000 retailers sell lottery tickets. Most of these outlets are convenience stores, but some are nonprofit organizations (such as churches and fraternal societies) or service stations. Many low-income households, however, lack access to convenient retail outlets. The NGISC report shows that these families are also less likely to play the lottery. This finding suggests that lotteries should not try to market their products to poor people.