a competition based on chance in which numbered tickets are sold and prizes are awarded to the holders of numbers that are drawn at random; often used as a means of raising money for a state or a charitable organization. The term lottery has also acquired a more general meaning, that of any arrangement in which a prize or set of prizes is allocated to members of a class by some process that depends wholly on chance. The class in question may be a group of people such as all the students of a particular school or all the residents of a particular town. The process of allocating prizes in this way has a long history. The casting of lots has been an ancient method for making decisions and determining fates, as described in several biblical passages.
Throughout the world, lotteries are operated by governments, private companies, nongovernmental organizations, and charitable groups. The prizes range from food to sports events to medical care. In addition, lottery revenues support many other activities of state governments and their constituents. The lottery is a classic example of a public service that, once established, tends to evolve without significant oversight or control by the legislature or executive branch. As a result, lottery policy is often dictated by the need to increase revenues.
When a new state lottery is introduced, the legislators and governors typically legislate a monopoly for the state; establish an agency or public corporation to run it; begin with a modest number of relatively simple games; and then, as revenue increases, progressively expand the game offerings and complexity of the games. State officials also must balance the need for large jackpots and publicity with the desire to generate a steady stream of incremental revenues.
The lottery has won broad public approval, in part because it is seen as a source of “painless” revenue: players voluntarily spend their money (as opposed to paying taxes) for the benefit of the public good. This argument is particularly persuasive in times of economic stress, but it also wins public approval when the state government’s fiscal condition is favorable.
A lottery’s success depends largely on its ability to attract a large and diverse pool of participants, with each participating demographic requiring different strategies for choosing their numbers. In some cases, winning tickets are chosen by all sorts of arcane, mystical, or random methods. In others, the numbers are chosen by birthdays, favorite numbers, patterns, or other arbitrary criteria.
Lottery advertising must focus on persuading prospective players to spend their money on the opportunity to win big prizes, and this requires a considerable amount of effort and expense. Research has shown, however, that poorer neighborhoods participate in lotteries at rates disproportionately lower than their proportion of the population.
When winning, the player may choose to receive his or her prize in a lump sum or annuity payment. Lump sum payments provide immediate cash, while annuities guarantee larger total payouts over time.