Since 1964, when New Hampshire launched the modern era of state lotteries, more than four-fifths of states have introduced their own. These lotteries have two enormous selling points: they are a form of gambling, but they also raise money for the public good without raising taxes.
Most state lotteries are designed as traditional raffles, where the public buys tickets to win a prize that will be announced at some future date. After a substantial portion of ticket sales are deducted for costs and the lottery’s profits, the remaining prize funds are distributed to winners. Lottery revenues often expand dramatically after being introduced, but they then level off or even decline. To maintain or increase revenue, state lotteries must introduce new games that appeal to the public’s interest and sense of novelty.
Lotteries are also popular for their large prizes, which attract a great many people who might otherwise not participate. However, if the prize amounts are very large, the probability of winning can be quite low, and the disutility of losing will be high for most participants.
The popularity of the lottery is often associated with a desire to gain wealth and prestige through chance. Some opponents of lotteries are concerned that they promote gambling, which they believe to be immoral. Others are worried about the consequences of gambling for poor and problem gamblers. Finally, there are those who simply believe that a government should not be in the business of running a lottery.