The Evolution of a Lottery

A lottery is an arrangement in which prizes, usually cash or goods, are allocated by drawing lots. The practice of making decisions or determining fates by lot has a long history, including several examples in the Bible and the Roman emperors’ gifting of property and slaves during Saturnalian feasts. But lottery games, in which players voluntarily spend their money for a chance to win a prize, are more recent.

State lotteries began to proliferate in the 1970s. The majority of states and the District of Columbia operate them today. The evolution of a lottery has largely followed the same pattern: each state legislates a monopoly for itself; establishes a public agency or corporation to run it (as opposed to licensing a private firm in exchange for a portion of revenues); begins operations with a modest number of relatively simple games; and, due to pressure for additional revenue, progressively expands its offerings and complexity.

A few states have tried to change the course of this trajectory, but a general trend is apparent. Lottery revenues grow dramatically upon their introduction, then level off and sometimes even decline. This has led to a race to introduce new games, in the hope of maintaining or increasing revenues. The resulting marketing tactics have been controversial. Critics charge that many lottery ads are deceptive, presenting misleading information about the odds of winning, inflating the value of the money won (lottery jackpots are typically paid in equal annual installments over 20 years, with inflation and taxes dramatically eroding their current value), and so on.