A lottery is a game in which participants pay money for the chance to win a prize based on the random selection of numbers. While the lottery is often criticized for being an addictive form of gambling, it can also be used to distribute prizes that benefit the public sector. Examples include a lottery for units in a subsidized housing block or kindergarten placements at a reputable public school. In addition to its traditional financial applications, the NBA holds a lottery for the top 14 teams’ draft picks in each of the first two rounds of the playoffs.
In the modern era, state lotteries have been introduced in virtually every state. The arguments for and against their adoption, the structure of the resulting lotteries, and the way they evolve are marked by remarkable uniformity.
The major argument for lotteries is that they raise “painless” revenue for state governments, which can use the money to avoid tax increases or to expand their social safety net. This narrative is especially effective during times of economic stress, but it has been shown that lottery revenues do not correlate with a state’s objective fiscal health.
Once a lottery has been established, debates shift from the general desirability of the lottery to specific features of its operations. These include concerns about the prevalence of compulsive gambling and alleged regressive effects on lower-income groups. In addition, lottery officials must manage a variety of stakeholder groups: convenience store operators (who buy the tickets); lottery suppliers (whose heavy contributions to state political campaigns are frequently reported); teachers (in states where lottery revenues are earmarked for education); and state legislators (who quickly become dependent on the revenue). This process can generate tensions between competing goals, which can only be resolved by political actors.