The term “lottery” refers to a game of chance in which tickets are sold for a prize, often money or goods. It has a long and varied history, dating back to the Roman Empire. At one time, it was common for wealthy members of the upper class to hold lottery games during dinner parties, awarding fancy articles such as fine tableware to the winners. The first modern public lotteries emerged in the Low Countries in the 15th century and were used to raise funds for town fortifications, as well as helping the poor.
State lottery revenues typically expand dramatically soon after a lottery is introduced, but then often level off and even decline. This is a result of the phenomenon known as “lottery boredom.” Revenues typically begin to plateau after a few years and are only maintained by innovations such as new games or higher prizes.
The lottery industry also has a problem with “political pollution.” The industry’s enormous growth often attracts special interests that distort the lottery’s mission. Typical examples include convenience store owners (whose customers are the main purchasers of lottery tickets); suppliers of lottery machines and equipment (heavy contributions to state political campaigns are frequently reported); teachers (in states where some of the proceeds are earmarked for education); and state legislators, who are accustomed to the lottery’s steady stream of revenue. In general, the evolution of a state lottery is a classic case of public policy being made piecemeal and incrementally, with no overall direction or vision. As a result, the lottery can create substantial dependencies for state governments on revenues that are difficult to control or regulate.