Public Uses of Lottery Proceeds

A lottery is a game of chance in which players pay money to win a prize based on the outcome of a random drawing. It is a popular form of gambling. Prizes range from cash to goods and services, from subsidized housing units to kindergarten placements. In the United States, state governments operate most lotteries. In addition to generating profits for the sponsoring government, the prize money may be used to fund public programs. The history of lotteries extends back at least to keno slips found in China during the Han dynasty (205 and 187 BC). Lotteries are often promoted as sources of “painless” revenue, with politicians arguing that voters favor them because they do not require tax increases or spending cuts.

Lottery revenues typically rise rapidly after they are introduced, then level off and decline over time. To maintain and even increase revenues, the industry must constantly introduce new games. Historically, most lotteries were traditional raffles in which bettors purchased tickets for a future drawing. But innovations in the 1970s led to lotteries with instant gratification, such as scratch-off tickets.

A significant portion of lottery funds — outside the winnings — goes toward organizing and promoting the game. A percentage also goes toward administrative costs and profits. Many state governments use the remainder of lottery proceeds to fund a variety of programs, including support centers and groups for problem gambling and addiction recovery. Other uses include enhancing general state infrastructure, such as roadwork and bridgework, and boosting police forces and social services.