Lottery Laws

A lottery is a scheme for the distribution of prizes by chance. Its exact origin is unknown, but it is believed that some form of it existed in ancient times and is still used today for military conscription, commercial promotions (in which property or goods are given away by a random procedure), and the selection of jury members from lists of registered voters. Modern lotteries are distinguished from gambling in that the payment of a consideration for the chance of receiving a prize is required.

Lottery laws usually establish a state monopoly; select and license retailers to sell tickets, redeem winning tickets, and pay high-tier prizes; promote and develop new games; and regulate ticket sales, player eligibility, and retailer compliance with state law and regulations. Some states also maintain a special lottery division to provide services that are not available from private lotteries, such as assisting retailers with promotional strategies and providing training for retail employees on the use of terminals to scan tickets.

The principal argument used to promote a state lottery is that proceeds can be used for public purposes without imposing onerous taxes on the middle and working classes. This argument is particularly effective during periods of economic stress, when voters are concerned about tax increases or cuts in public programs. However, research shows that the objective fiscal condition of a state does not have much influence on whether or when it adopts a lottery. Moreover, the popularity of a lottery is independent of its contribution to a state’s revenue.