The lottery is a form of gambling that involves the drawing of numbers for prizes. Prizes may be money, goods, or services. Lotteries are usually organized by state governments, but private businesses and other groups also may organize them. The first known lotteries were held in the Low Countries during the 15th century to raise funds for town fortifications and help the poor. The casting of lots to determine ownership or other rights is recorded in many ancient documents, including the Bible. The modern state-sponsored lottery was first introduced in the United States by New Hampshire in 1964, but it quickly gained popularity and other states soon followed suit. By 2004 lotteries were operating in forty states and the District of Columbia.
The basic elements of a lottery are: a pool of prizes, a mechanism for allocating those prizes (often through a hierarchy of sales agents), and rules that determine how often and what kinds of prizes are awarded. Generally, a percentage of the total pool must go toward organizing and promoting the lottery, and some prize winnings are retained by the organizers or sponsors for future draws. The remainder, called the jackpot or winnings, is offered to the winner.
Most state-run lotteries offer a large number of games, each with different chances of winning. In addition to the prizes, each game is designed to attract a specific audience. For example, many of the games are designed to appeal to people who enjoy a particular hobby, such as collecting coins or stamps. A few lotteries also are designed to attract lottery players who are especially interested in sports or other forms of recreation.
Because lotteries are a business, they must maximize revenues and thus spend most of their advertising dollars on persuading potential bettors to spend their money on the lottery. But such promotion of gambling is controversial. It can have adverse consequences for the poor, problem gamblers, and others; and it can create the illusion that lotteries are providing valuable public services.
Moreover, the way that state lotteries are run—as businesses that seek to maximize profits—may be at cross-purposes with the public interest. In addition to their general population audience, state lotteries develop extensive specific constituencies: convenience store operators; lottery suppliers (whose heavy contributions to state political campaigns are frequently reported); teachers, in those states where the proceeds from the lottery are earmarked for education; and legislators, who become accustomed to having a reliable source of revenue to supplement other sources of government income.
Most lottery games today are played by purchasing a ticket that is preprinted with a number and then entering it into a drawing for a prize. Early lotteries, however, were simpler, in which a person purchased a blank ticket and then wrote or drew a number on it. The winners of these games were notified by mail. A variety of retailers now sell state-sponsored lottery tickets, including convenience stores, supermarkets, gas stations, churches and fraternal organizations, restaurants and bars, bowling alleys, and newsstands.