Lotteries are a popular source of tax revenue. They have a long history in the Low Countries and are widely seen as a “painless” form of taxation, with players voluntarily spending their money for the benefit of the public. In the United States, lottery revenue has helped build many colleges (e.g., Harvard and Yale), and has financed canals, roads, bridges, schools, churches, and public works projects.
The casting of lots to make decisions and determine fates has a very long record in human history, but the use of lotteries for material gain is much more recent. The first recorded public lotteries in Europe were probably organized in the 15th century by towns attempting to raise funds to fortify town walls or help the poor. Francis I of France encouraged the growth of lotteries for private and public profit in his cities.
In the United States, the modern revival of state-sponsored lotteries began in 1964 with New Hampshire’s establishment of a lottery. Since that time, lotteries have spread to all 37 states and the District of Columbia, and their operations have evolved along remarkably similar patterns.
The emergence of the modern state-sponsored lottery has raised serious questions about whether this is an appropriate function for government. A state lottery is a business, with the purpose of maximizing revenues; its advertising necessarily concentrates on persuading target groups to spend their money on tickets. Given that this type of gambling promotion can have negative consequences for the poor and problem gamblers, it is not clear whether a state lottery serves an important public purpose.