How Lottery Profits Are Used by Governments to Fund Public Welfare Programs

Lottery is a form of gambling in which tickets are sold for a chance to win a prize, typically money or goods. Lotteries are also used for military conscription, commercial promotions in which property is given away by a random procedure and the selection of jury members from lists of registered voters. Modern state-sponsored lotteries offer a wide variety of games including keno, video poker, scratch-off tickets and other traditional forms of lottery. Lottery profits are often used by state governments to promote public welfare programs.

The earliest known public lotteries were held in the Low Countries in the 15th century to raise funds for town fortifications and to help the poor. The concept is much older, however, as evidenced by a biblical verse instructing Moses to divide land among the people by lot, and by the ancient practice of giving away slaves and property by drawing lots. Lotteries became popular as a means of raising money for public projects during the American Revolution and later helped finance many colleges, such as Harvard, Dartmouth, Yale, King’s College (now Columbia), Union and Brown.

State governments that use the lottery depend on it for a significant portion of their revenues. This has made them reliant on lottery profits and susceptible to pressure from opponents of taxes. A recent study by Clotfelter and Cook found that states that have a lottery often find themselves facing an inherent conflict between the government’s desire to increase revenues and its responsibility to protect the public welfare.