A lottery is a type of gambling in which people pay a nominal sum to have a chance of winning a prize. Some prizes are cash, while others are goods or services. Governments frequently organize lotteries to raise money for public projects.
Critics of lotteries argue that they promote addictive gambling behavior and function as a regressive tax on the poor. They also claim that lotteries make it harder for state governments to keep their social safety nets intact by diverting resources to the lottery.
This article argues that those critics are misguided and that, whatever the impact on revenue and illegal gambling may be, lotteries also have significant benefits for society. Using data from state lottery sales, the authors show that lottery revenues are highly diversified and that states use them for a variety of purposes. They also show that lotteries generate much more revenue than they cost to operate, making them an attractive alternative to other revenue sources.
Lotteries have a long history of popularity in Europe, where they were introduced by the Roman Empire for the distribution of slaves and property. In America, they first appeared in the 17th century, with the Continental Congress organizing a lottery to raise funds for the American Revolution and later holding private lotteries that helped build colleges such as Harvard, Dartmouth, Yale, Union, King’s College (now Columbia), and William and Mary. They were outlawed in ten states between 1844 and 1859.