What is a Lottery?

lottery

A lottery is a game in which tickets are sold and prizes are awarded by chance drawing. The word derives from the Dutch Lotterie, which in turn is a compound of Middle Dutch Loterie (“the action of drawing lots”) and Old English lot (“fate”).

Making decisions and determining fates by casting lots has a long record in human history, but using the lottery for material gain is more recent. The first recorded public lotteries to award money for winning entries were held in the 15th century in the Low Countries to raise money for town fortifications and poor relief.

The basic elements of a lottery are a means for recording the identities and amounts staked by bettors, and for pooling those stakes in a drawing for prizes. For many modern lotteries, bettors write their names on a ticket that is then either collected and deposited with the lottery organization or, more commonly, placed in an electronic pool for subsequent shuffling and selection as a prize winner.

As with all commercial products, the relative attractiveness of a lottery is affected by the overall economic climate. As Cohen and Clotfelter point out, lottery participation peaks when incomes fall, unemployment rises, and social safety nets erode.

Once established, a state lottery typically begins with a limited number of simple games and expands in response to a growing demand for more complex, higher-margin offerings. This approach, combined with the reliance of lottery officials on the cyclical nature of revenue growth, has left few states with a coherent gaming or lottery policy.