The practice of making decisions or determining fates by drawing lots has a long record in human history. Moses was instructed in the Old Testament to take a census of Israel and divide it by lot, for instance. Roman emperors used lotteries to give away property and slaves during Saturnalian feasts. Public lotteries have been around for centuries; they were a popular means of raising money in the United States for projects including the building of Harvard, Yale, Dartmouth, and King’s College (now Columbia) as well as many other public institutions. Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British.
Lottery revenues typically expand rapidly after a state’s first few years of operation, then level off and occasionally decline. Revenues are maintained through constant innovation in games such as keno and video poker, as well as a heavy promotion effort centered on advertising.
While most people realize that they are unlikely to win, the hope of winning provides substantial value for some players. For example, for poor people who don’t see much of a path upwards in the economy, the chance to win the lottery offers a glimmer of hope that they will one day get out of their precarious circumstances.
As a business enterprise run by a government, the lottery must focus on persuading people to spend their money on tickets. That has important repercussions for the poor and problem gamblers, but it also raises the question: does promoting gambling serve a public good?