The History of the Lottery
The lottery is a popular form of gambling in which the winnings depend on numbers drawn at random. While state lotteries vary in size and complexity, they are generally similar in structure and operations. They start with the government legitimating a state-sponsored monopoly; establish a public corporation to run the operation (as opposed to licensing private firms in return for a share of the profits); begin with a modest number of relatively simple games; and, driven by the need for higher revenues, progressively expand the scope and complexity of the offerings.
When states first began promoting the idea of establishing state lotteries, they emphasized the potential for them to provide a new source of painless tax revenue. The concept was appealing to voters, who viewed the lottery as a way for them to spend their money voluntarily and benefit the general public in return. Moreover, it was a much better alternative to raising taxes or cutting government services.
State lotteries have consistently won broad public approval for their introduction, and this support has not been affected by the underlying fiscal health of a state. In fact, studies have shown that the popularity of a lottery is not related to the state government’s overall financial condition; it has also gained popularity in states with solid budget surpluses.
Once a lottery is established, the debates and criticism shift from the basic desirability of the enterprise to its specific features and operations. For example, critics now focus on the problem of compulsive gamblers and the alleged regressive impact on lower-income groups.
Historically, lotteries have been used to finance a wide range of public and private endeavors. The early British colonial settlement of America was largely financed by lotteries, and they were a common form of raising funds during the American Revolution and for various military and commercial projects. During the French and Indian War, colonial legislatures approved the establishment of several lotteries to finance local militias and the expansion of the colonies’ infrastructure.
By the end of the nineteenth century, the United States had become a global leader in lottery play and had one of the largest and most profitable lotteries in the world. Its popularity, however, was waning and the industry was beginning to look dated. Lottery operators knew they needed to change the game. They introduced a series of innovations, most notably the development of scratch-off tickets, which offered lower prize amounts but much more attractive odds of winning. The success of this new format proved to be the catalyst for a dramatic transformation in lottery play and in how the industry was perceived. This transformation was a significant factor in the renewed resurgence of the lottery in the nineteen-sixties and beyond.