A lottery is an arrangement in which prizes are allocated by a process that relies entirely on chance. The prizes are typically cash or goods, but may also be services or other intangible assets such as real estate and stocks. State governments have long used lotteries to fund public projects, particularly those associated with infrastructure and education.
Whether or not the lottery promotes problem gambling, the fact that it is run as a business with a focus on maximizing revenues raises questions about its appropriateness for government. In addition, the promotion of gambling can have unintended consequences for the poor and problem gamblers, and even if these are minimal, is it appropriate for state governments to be at cross-purposes with the larger public interest?
States adopt lotteries based on the argument that they provide a source of “painless” revenue, because the proceeds are received by state legislators who do not have to raise taxes or cut public programs. This argument is a powerful one, especially during times of economic stress when voters fear increases in taxes or cuts to public services. However, research has shown that the actual fiscal condition of the state government does not have much influence on the decision to adopt a lottery.
As a result, many state lotteries expand rapidly following their introduction, but then plateau or even decline. This leads to constant pressure to introduce new games in order to increase revenues. However, such expansion often proves short-lived and eventually leads to a lottery becoming tired and boring, resulting in fewer ticket sales.
