A competition based on chance, in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random. State lotteries are a common source of revenue for governments and charities. They are a form of gambling, but unlike casinos and sports betting, the money players spend on lottery tickets is not taxed.
The concept behind a lottery is that you pay for a chance to win something, which could be anything from money to jewelry to a new car. Federal law defines a lottery as an arrangement in which “consideration” is paid for the right to participate in a process which “awards prizes by chance”.
In the early colonies, paving streets, building wharves and churches were financed with lotteries. In fact, George Washington sponsored a lottery in 1768 to finance the construction of a road across the Blue Ridge Mountains. However, taxes had never been accepted as a legitimate way to finance public projects, and critics often pointed to lotteries as a hidden form of taxation.
Lotteries are run as a business with the goal of maximizing revenues. As a result, they promote themselves by dangling the promise of instant riches to target groups. It’s a message that can’t be argued with: people just plain like to gamble, and they want to feel rich. But is promoting gambling, and relying on it to raise revenue, an appropriate function for government at any level? And does it have negative consequences, particularly for lower incomes and problem gamblers?
