Lottery is a process in which prizes are allocated by a system that relies on chance. The term may refer to any kind of lottery arrangement, from those that award units in a subsidized housing block to kindergarten placements at a local public school. But the most common form of lottery is the game that dishes out cash prizes to paying participants.
The history of the lottery shows that it has often been used as a means to raise money for public purposes. Benjamin Franklin held a lottery in order to fund cannons for his army during the American Revolution, while Thomas Jefferson used one to try to alleviate his crushing debts. In modern times, governments have held a variety of lotteries to raise funds for public works projects and other programs.
A number of states now have state lotteries. Typically, they begin operations with a small number of relatively simple games; they establish a monopoly for themselves or license private firms to run the lottery; and then, under constant pressure to increase revenues, progressively expand the offerings.
Lotteries are a classic example of the tendency of public policy to evolve piecemeal and incrementally. The decisions that go into establishing a lottery are quickly overtaken by the ongoing evolution of the industry, and little if any attention is paid to the general welfare implications of the arrangement. Studies have shown that the poor participate in state lotteries at rates far below their proportion of the population, and that they also receive less from the proceeds of the games than do those from higher-income neighborhoods.