What is a Lottery?

A lottery is a procedure for distributing something (usually money or prizes) among a group of people by chance. The word “lottery” comes from the Dutch word lotinge, meaning “drawing.”

There is considerable evidence that the use of lottery as a means to distribute material benefits dates back many centuries. Records from the Middle Ages indicate that some towns in the Low Countries held public lotteries to raise funds for town walls and fortifications, as well as for charity work.

The earliest documented example of an organized lottery to distribute prize money, however, dates from 1466 in Bruges, Belgium. In that year the town held a lottery of 4,304 tickets and a total prize fund of 1737 florins[1].

Although the popularity of lotteries appears to be dependent upon state fiscal health, this link has not been demonstrated in any convincing way. Studies have shown that state governments win broad public approval for lotteries when they are viewed as a means of raising public revenues for public goods such as education, regardless of the overall fiscal condition of the state.

Once a lottery is established, revenues typically expand dramatically after the lottery is launched, then level off and begin to decline. This is due to a phenomenon known as the “boredom factor.” To maintain or increase revenues, a lottery may introduce new games, often more complex than the initial ones.

In the United States, state lotteries have become remarkably popular. Sales of tickets were over $44 billion in fiscal year 2003, up 6.6% from fiscal 2002.