The lottery is a public enterprise whose goal is to generate revenue for the state. It is a classic example of how state policy often works at cross-purposes with the general public interest. Lottery officials are concerned with maximizing revenues, while public opinion and public interest groups are focused on the potential negative impacts of gambling — especially on poor people and problem gamblers.
A lottery is a form of raffle where a person can win a prize by selecting numbers or symbols. It is a popular fundraising technique in many countries. Prizes can range from money to goods to sports team draft picks. The practice has been around for centuries. The earliest recorded examples are keno slips from the Chinese Han dynasty (205–187 BC).
Modern state lotteries are based on the British model of a state-sponsored monopoly operated by a public corporation or government agency. They begin with a legislatively established monopoly; establish a state agency to run the lottery (instead of licensing a private company for a fee); and start operations with a small number of relatively simple games. Revenues expand rapidly and then level off or decline, leading lottery managers to introduce new games in an attempt to increase or maintain revenues.
Lotteries are a recurrent source of criticism because they are perceived as a “hidden tax.” Numerous studies have shown that those with low incomes play disproportionately, and the amounts spent on lottery tickets can quickly become a significant budget drain.