The History of the Lottery


Lottery is a game in which you have an opportunity to win a prize if you correctly select numbers. The prizes are normally money or goods. Some states regulate the prizes and the games. Many people play the lottery to try to win big. Others do it to enjoy the entertainment value. Regardless of why you play, it’s important to understand the rules and regulations before you begin playing. If you want to make sure that you don’t get ripped off, read the rules carefully.

The casting of lots has a long record in human history. It was common in the Roman Empire—Nero was a big fan—and is attested to throughout the Bible, for everything from choosing kings to divining God’s will. However, the use of lotteries for material gain is more recent, beginning in the fourteenth century. The first recorded public lottery was held to finance municipal repairs in Rome. In the seventeenth and eighteenth centuries, a number of European countries established state-sanctioned lotteries to fund a wide range of projects, from bridges and canals to universities and churches.

While lottery winnings can be a significant source of wealth, the fact is that most players lose more than they gain. For most, the expected utility of monetary gains is less than the cost of purchasing tickets and paying taxes on the winnings. For example, according to a recent study by the consumer financial company Bankrate, people who make more than fifty thousand dollars a year spend on average one per cent of their income on lotteries; those who earn less than thirty thousand dollars spend thirteen percent.

In early America, despite Protestant proscriptions against gambling, lotteries grew rapidly. They played a key role in the settlement of the colonies and helped finance private as well as public ventures: roads, libraries, colleges, churches, canals, ports, even the construction of fortifications and churches. Benjamin Franklin used a lottery to raise funds for cannons to defend Philadelphia against the British during the Revolutionary War.

Lotteries became increasingly popular as states strained to balance budgets and meet rising demand for services without raising taxes or cutting spending. By the nineteen sixties, soaring inflation and the costs of the Vietnam War had caused a steep decline in state revenues. Balancing the budget required either raising taxes or cutting services—both of which were wildly unpopular with voters. Lotteries filled the gap, allowing governments to raise much-needed revenue while keeping their hands off the purse strings.

Today’s lotteries are largely commercial enterprises that offer a range of games with different prize amounts. A large percentage of the proceeds goes to expenses, including costs of organizing and promoting the lottery; a smaller percentage is usually retained as profits and revenues for the state or sponsor. The remaining prize pool is divided into categories with different frequencies and prize sizes. Some prizes are very large; others are a series of small prizes.