What is a Lottery?


Lottery is a method of raising money in which tickets are sold for a chance to win prizes. The prize amounts can be large or small, and sometimes the proceeds are donated to charities. During the early days of state-sponsored lotteries, they were used to help pay for public works such as roads, canals, and bridges. Today, lotteries are used to support a wide range of government activities. Some are run by private corporations and others by government agencies.

The word lottery comes from the Dutch language and translates as “fateful drawing” or “fateful choice.” The first lotteries in Europe were probably held by individual towns for the purpose of funding town fortifications and to give assistance to the poor. The earliest known printed advertisements for lotteries appeared in the Low Countries in the first half of the 15th century.

In the United States, lotteries have long been popular with the public, and they are now a major source of revenue for state governments. Between 1964 and 2019, the states have raised more than $502 billion through lotteries. But when placed in the context of overall state revenue and expenditures, that amount represents only about 2 percent of total state funding.

Despite the low odds of winning, many people continue to purchase lottery tickets. This behavior is difficult to explain using decision models based on expected value maximization. Rather, it appears to be driven by risk-seeking and hedonistic considerations. The purchase of lottery tickets enables buyers to experience a thrill and indulge in a fantasy of becoming rich.

The term lottery is also applied to any situation that seems to depend on luck or chance. The stock market, for example, is often referred to as a lottery. Similarly, life itself can seem like a lottery: what happens to us depends entirely on chance, and the outcome of any given situation is unknown.

In the immediate post-World War II period, lotteries provided an attractive way for states to expand social safety nets without increasing taxes on the middle and working classes. But as state costs soared, it became increasingly difficult to sustain that arrangement. By the 1960s, it was clear that the lotteries would not provide enough new income to offset a reduction in other taxes and adequately bolster government spending.

Today, the lottery is one of the most important sources of revenue for public education. Lottery funds are distributed by county, with formulas based on Average Daily Attendance for elementary and secondary schools and full-time enrollment for colleges and other specialized institutions. Each quarter, the State Controller’s Office releases detailed reports of lottery contributions to education in each county. Click on a county in the map below to view those reports.