The official lottery is the state-sponsored game of chance in which a ticket is purchased for the chance to win a cash prize. Almost thirty states sponsor lotteries, and they have reaped tremendously high profits for their sponsors. In 2002, the prizes awarded by lottery games totaled over $42 billion. Supporters of the lottery argue that it is an easy revenue-raiser and a painless alternative to higher taxes. Opponents criticize it as dishonest and unseemly, charging that the game merely skirts taxation by exploiting the gullible. They also slam it for expanding the number of gamblers and fostering addiction.
There are many ways for the government to raise money, but lotteries are perhaps the most popular. The history of lotteries is long and complex, but their popularity in the modern sense is relatively recent. Until the mid-20th century, most states relied on taxes to fund public services. Lotteries have supplanted a variety of tax-raising activities, including income, sales, and corporate taxes.
State legislatures establish lotteries in statutes, which set the rules for the games and determine how prizes are distributed. They create a state agency to run the lottery (not license a private firm in return for a share of profits), usually starting with a modest number of fairly simple games, and gradually increasing their complexity. They often promote the lottery by purchasing commercial time in newspapers and radio and television programs, advertising, and other methods.
In colonial America, the lottery was a crucial source of capital for private and public projects. It helped finance roads, canals, bridges, churches, schools, and colleges, as well as fortifications and militias. It also financed the expeditions against Canada and other frontier ventures, and it was instrumental in funding the formation of Columbia University in 1740.
Today, lottery games are the most popular gambling activity in the United States and generate huge profits for the state. They attract players with their dazzling jackpots, which increase the odds of winning and keep the games popular. In addition, state-run lotteries develop extensive specific constituencies that include convenience store operators; suppliers of equipment and tickets (who contribute heavily to state political campaigns); teachers (in states in which lottery revenues are earmarked for education); and legislators (who quickly become accustomed to the additional cash).
Despite the massive popularity and profitability of state-sponsored lotteries, they remain controversial. Critics charge that they are not only dishonest and unethical, but that they entrap people in addictive gambling behavior and divert resources from the neediest among us. They also argue that the lottery is a regressive tax on poorer people. Nevertheless, arguments against the lottery have generally fallen on deaf ears, and it is unlikely that the games will be abolished any time soon.