The Evolution of State Lotteries


Lotteries are a popular and relatively simple way to raise money for a government, charity, or other purpose. They are often considered a form of gambling, but there is little evidence that they are inherently illegal or dangerous to participate in.

Historically, lottery use has ranged from fundraising for public works projects to financing private business and even military campaigns. In colonial America, lottery money was used to help finance the establishment of a number of colleges, including Harvard and Yale. The American Revolution and the Civil War both saw large-scale lottery programs.

The Evolution of State Lotteries

Although lottery revenues have expanded dramatically in the past several decades, they continue to fluctuate. This is the result of an inherent “boredom factor.” Revenues typically rise and fall as new games are introduced, then level off. This creates a constant need for the state to come up with new games, in order to keep revenues high and attract new players.

As the industry evolves, so do complaints from critics about its effects on low-income groups and the general population. Critics of lottery play have pointed to the high rate of compulsive gambling among low-income groups and alleged regressive impact on lower-income people.

Many states, however, are able to use lottery revenue to fund social services such as welfare or other benefits. A study by the National Center on Addiction and Substance Abuse found that nearly 25% of lottery revenue in Minnesota goes into programs for elderly individuals, while the Pennsylvania Lottery has invested over a billion dollars to support gambling addiction recovery.

In addition, many states use lottery revenues to help pay for public works such as road and bridge construction. They may also fund programs to help people with disabilities or to increase funding for police forces, libraries, and other social service organizations.

Moreover, lottery revenues have been used to fund support centers for the treatment of drug and alcohol abuse. In fact, a recent study by the University of Washington found that more than half of the revenue generated by the state’s lottery went toward the treatment of substance abuse.

A key element common to all lotteries is the collection and pooling of stakes from all bettor who buy tickets. This is accomplished by a hierarchy of sales agents who pass money paid for the tickets up through their organizations until it is “banked.” Some sales agents also purchase whole ticket-fractions (i.e. tenths of the whole ticket) for marketing in the streets, where customers can place small stakes on the fractions at a slightly higher cost than the fraction itself.