The official lottery is a game of chance run by state governments to raise money for public services. A state may choose to use the proceeds for a range of purposes, from improving roads to promoting industry, but it is often required to set aside a specific percentage of receipts for prizes. Prizes may be cash, goods, or services. Most lotteries have fixed prize funds, but some have variable prizes based on the number of tickets sold, creating a risk for organizers if ticket sales fall below expectations.
Throughout the history of the United States, state-sanctioned lotteries have drawn fierce opposition from devout religious and moral sensibilities. Among these critics, who hailed from across the political spectrum and all walks of life, the most vociferous were members of Protestant evangelical movements that viewed gambling as morally unconscionable. Others feared that the lottery would encourage gambling addiction and lead to criminal activity.
These concerns proved largely groundless. The first state-run lottery began in 1964, and a wave of expansion followed, as states that did not offer a lottery saw their citizens pouring gambling dollars into neighboring ones, where the proceeds were used for public service, thus making a state-sponsored version of the game necessary to retain control of its revenue. The phenomenon was especially pronounced in New Hampshire, which became the first legal lottery in the country after a high-profile campaign that touted the new revenue source as a boon for education, with the first-year lottery revenues covering about five per cent of state spending.
As more and more states adopted lotteries, they began to form networks in order to increase jackpot sizes and attract more players. This is how Powerball and Mega Millions came to be, and it also led to the formation of a handful of multistate games that are still in operation today.
In addition, state-run lotteries have provided an alternative source of revenue for governments that have been traditionally averse to taxing. Lottery proceeds have paid for everything from civil defense to public works projects, and even for the construction of churches. Benjamin Franklin’s “Philadelphia Lottery” in 1737 offered land and slaves as prizes, and George Washington managed a lottery to raise money for his mountain road project in 1768. Rare tickets bearing the president’s signature now fetch thousands of dollars.
While some state officials have warned of the dangers of gambling, most now support a lottery, arguing that it helps pay for essential government functions and reduces dependence on unreliable revenue sources like income taxes. Other states have learned lessons the hard way, as Maryland found in fiscal year 1991-92 when a large advertising campaign for a new game failed to produce expected ticket sales and forced the state to cut public services to cover the shortfall. In a few cases, state legislatures have even made changes to the law to allow lottery profits to be spent on a wider variety of purposes. The New York Times reported on one such case in March of this year.