The casting of lots to determine fates or distribute material rewards has a long history in human culture—from the Old Testament to Roman emperors giving away property and slaves by lot. Today state lotteries raise billions of dollars each year, with Americans spending about $100 billion on tickets.1 Despite this success, lottery games continue to draw criticism about their addictive nature, alleged regressive impact on lower-income groups, and other questions of public policy. These criticisms both reflect and drive the continuing evolution of the industry.
The earliest state lotteries were established to raise money for specific public uses such as municipal repairs or education. They grew in popularity as they proved easy to organize and popular with the general population. The first modern state lottery was introduced in New Hampshire in 1964, and the practice soon spread to other states as governments sought alternative ways of raising revenues without raising taxes.
While there is an inextricable pleasure to playing the lottery, the odds of winning are incredibly low. The vast majority of players do not win the big prize, and it is not uncommon for those who do to find themselves in financial trouble after their windfall. Those who win should consult with a financial advisor before making any major purchases and consider how they will manage their prize in terms of tax obligations and investing in their future.
Ultimately, the popularity of state lotteries has little to do with their actual fiscal health. It is far more likely to depend on their ability to appeal to a particular public interest—in this case, a desire to avoid increasing state taxes.