The casting of lots for decisions and determination of fate has a long record in human history. Modern lotteries, however, usually involve a payment in exchange for a chance to win a prize – typically money. Lottery revenues are used to finance a wide range of state programs, including public works projects, education, and even military conscription. Some states also have lotteries to distribute municipal or state-level government services, such as a seat on the city council or a firefighter’s job.
The defenders of lotteries point to their painless nature, claiming that the money they raise is better than raising taxes and thus less painful to voters and politicians. They also emphasize the specific benefit of lottery funds for state programs, pointing out that they support higher education, public safety, and other important needs. In fact, though, the percentage of overall state revenue that lotteries generate is small compared to other revenue sources.
Moreover, lottery revenues expand dramatically after initial introduction and then level off or even decline over time. In order to maintain or increase revenues, lottery operators are constantly introducing new games that have lower jackpots but more frequent wins. The plot above shows the results of one such game over a 10-year period. Each row represents an application, and each color indicates the number of times that application was awarded a given position. The close correlation between rows and colors indicates that the lottery is unbiased, and that each application has a similar probability of winning.
