A lottery is a game in which participants purchase numbered tickets for a chance to win a prize. Typically, the prize is a large sum of money, which will be paid in several installments over time (with taxes dramatically eroding its current value). Lotteries are a popular form of gambling. Although some critics contend that they promote compulsive gambling, others argue that they are a way for the state to raise funds for a range of public needs without raising taxes or cutting services.
In the United States, state lotteries were first introduced in the nineteen-sixties. Cohen argues that they evolved at a time when popular antipathy to tax increases and government cuts was peaking and the need to balance state budgets became increasingly difficult. He describes how voters and politicians saw lotteries as a source of “painless” revenues—that is, taxpayer dollars that go to governments for free rather than being derived from direct government appropriations.
Once established, the lottery quickly gained popularity. The reasons for its success are numerous, but a number of factors stand out. The lottery is easy to administer; it requires no direct appropriation from the state; it can be conducted by private companies; it can offer prizes in a variety of forms; and, most important, it provides an opportunity for people of all income levels to participate. It is also relatively cheap to market and promote, and it can be marketed through a wide range of channels, from television and radio to billboards and the Internet.
In its early years, the lottery tended to be a fairly local affair. Various towns held lotteries to raise funds for town fortifications or other civic projects. Benjamin Franklin even sponsored a lottery in 1776 to finance the construction of cannons for defense of Philadelphia. In later times, however, the lottery became a national phenomenon.
While the popularity of the lottery has varied, it remains consistent, particularly during times of economic stress. Studies have shown that the objective fiscal health of a state has little impact on whether or when it adopts a lottery, and once a lottery is established, it typically enjoys broad public support.
Despite the widespread appeal of the lottery, its growth and development have not been without controversy. Critics have argued that it is unfair to rely on such volatile revenue streams and that the lottery’s regressive effect on lower-income neighborhoods is a serious social problem. In addition, it has been observed that the bulk of lottery players and revenues come from middle-income neighborhoods, while low-income communities are much less likely to play. Nevertheless, the lottery continues to expand, in part because of persistent pressure to generate additional revenues. In the past twenty-five years, it has added games and increased advertising. It is a reminder of the difficulty of maintaining a balance between competing goals and interests in an era of ever-increasing specialization and a growing reliance on markets for government services.