What is the Lottery?

The lottery is a game of chance in which numbered tickets are sold and prizes, usually cash or goods, are awarded to winners selected at random. Lotteries are a common source of public funding for state-wide or local projects, such as road construction and maintenance, educational facilities, and other community improvement initiatives. Many people play the lottery for fun, while others believe that winning the lottery will give them a better life. In the United States, lottery participation is widespread and contributes billions to annual state revenues. Nevertheless, the lottery is considered to be a form of gambling and is regulated by federal and state laws.

The term “lottery” is derived from the Dutch word lot, meaning “fate.” While the term is often used to describe games of chance, it can also refer to a wide variety of other arrangements in which the distribution of some property, or even a whole estate, is determined by lot, including military conscription, commercial promotions (such as the apophoreta, where pieces of wood bearing symbols were drawn at Saturnalian feasts), and the selection of jury members for trials and grand juries.

Modern state-sponsored lotteries follow a similar pattern: the state legislates a monopoly for itself; establishes a public corporation or state agency to run the lottery (as opposed to licensing it out to private companies in exchange for a percentage of sales); begins operations with a modest number of relatively simple games; and, as revenue grows, introduces new games to maintain and increase the growth rate.

These new games typically feature lower prize amounts, in the range of 10s or 100s of dollars, with relatively high odds, on the order of 1 in 4. The initial odds of success are so enticing that many people play, despite the fact that they are likely to lose money over time.

While the popularity of the lottery has grown, critics point to its inherent irrationality and the ways in which it manipulates people’s desires. They contend that lottery advertising presents misleading information about the chances of winning, inflates the value of the prize money (lottery jackpots are commonly paid in equal annual installments over 20 years, with inflation and taxes dramatically eroding the current value), and promotes the false message that winning the lottery is a “fast-track” to riches.

While these concerns are legitimate, there is a more basic issue at play. People simply like to gamble, and the lottery is one of the few activities in which this can be done legally and at very low cost. For this reason, lotteries are a valuable part of our social fabric and should be preserved as such. However, they must be carefully regulated to ensure that their benefits outweigh their costs. For example, the lottery should not be marketed as an alternative to paying for education or other essential services. This article was originally published in the September 2012 issue of the Harvard Law Review. It is reproduced here with the permission of the authors.