What is a Lottery?


A lottery is an arrangement in which prizes are allocated by a process that relies wholly on chance. The prize allocation can be either a monetary or non-monetary prize. If the entertainment value (or other non-monetary value) obtained by a player outweighs the disutility of a monetary loss, the purchase of a ticket is a rational decision for that individual.

Governments use lotteries to raise revenue by allowing players to voluntarily spend their money on the chance of winning a prize. The primary argument in support of this practice is that the ill effects of gambling are not nearly as great as those of alcohol and tobacco, other vices governments use to raise tax revenues. Critics, however, point out that earmarking lottery proceeds for a particular program does not increase the amount of funding actually allocated to that purpose. Instead, the money simply reduces the overall appropriations available to the legislature from its general fund.

While many different states have lotteries, they all follow a similar pattern: the state establishes a monopoly for itself; hires a private firm to promote and run the lottery; starts with a small number of simple games and slowly expands as demand increases. Historically, lottery revenues have expanded dramatically after being introduced, then leveled off or even declined. This “boredom factor” has led to the introduction of new games in an attempt to maintain or increase revenues. However, research has shown that the chances of winning a lottery prize do not get better with repeated plays.