History of Lottery


Lottery is a scheme for the distribution of prizes, such as cash or goods, in which numbered tickets are sold for a chance to win a prize by random selection. It is a form of gambling and a method of raising money, especially for public charitable purposes. The word lottery is derived from the Latin loteria, meaning “fateful drawing of lots.”

The history of lottery dates back to the Low Countries in the 15th century, with records of towns holding lotteries to raise funds for town fortifications and to help poor citizens. The prize money was either cash or goods, such as food. In modern times, lottery games are governed by laws and regulations, and are generally operated in state-licensed establishments. Prizes are awarded by random selection, often using a machine or an automated process, although the exact mechanism varies by country.

In colonial America, lotteries played a major role in the financing of private and public ventures, including roads, libraries, colleges, canals, bridges, and churches. During the French and Indian War, some colonies used lotteries to fund military expeditions. The practice of splitting a lottery ticket into fractions, usually tenths, was common, and the cost of each share was less than that of the entire ticket. A sales hierarchy of ticket brokers and agents was used to collect and pool the stakes, and tickets were often marketed in street corners and shops.

By the early nineteen-seventies, however, a fascination with unimaginable wealth, in part fueled by television and movies showing the rewards of winning the lottery, coincided with a steep decline in financial security for most working people. Income inequality widened, job security diminished, pensions vanished, health-care costs increased, and the nation’s long-held promise that education and hard work would guarantee children a better future than their parents’ generation ceased to hold true.

In the late twentieth century, state-sponsored lotteries continued to flourish despite opposition from devout religious groups, who viewed them as morally corrupt and immoral, and from economists, who worried that they reduced economic growth. The popularity of lotteries accelerated in the eighties, when state budgets were shrinking and federal funds flowing into many state coffers declined.

While some critics argue that the amount of entertainment value received for a lottery ticket purchase exceeds its monetary cost, others counter that a lottery’s reliance on chance reduces its utility. Still, for the vast majority of people who participate in a lottery, the expected utility of winning is so high that the disutility of a monetary loss can be outweighed by the benefits of a larger fortune. Moreover, the decision to play the lottery is a rational choice under most circumstances because of its relative simplicity and low risk. This is in contrast to investing large amounts of capital in businesses or real estate that require a significant investment of time and resources with uncertain returns.