What is a Lottery?


A lottery is a form of gambling in which numbers are drawn at random and prizes are offered to ticket holders. Lotteries are operated by governments and private companies to raise money for public or private purposes. The casting of lots for decisions and determining fates has a long history in human culture, including several instances in the Bible; the first recorded public lottery to distribute prize money occurred during the reign of Augustus Caesar to fund municipal repairs in Rome. Modern lotteries have a more limited history, with the first in the United States occurring in 1844 in New Hampshire and the first state-regulated lotteries beginning in 1964.

People buy lottery tickets to get entertainment value and, in some cases, to overcome a negative utility associated with their current situation (e.g., financial loss or social stigma). For these individuals, the expected utility of a monetary gain from a lottery play can outweigh the disutility of losing money.

Many people buy more tickets than they need, hoping to improve their chances of winning by balancing the number of low and high numbers. Statistically, however, this is an inefficient strategy. A person with a low probability of winning would be better off purchasing just one ticket than two or more.

Lottery commissions often market lottery games as a harmless pastime for people to enjoy, a message that glosses over their regressivity. Moreover, this message obscures the fact that some people are deeply addicted to the activity and spend a significant portion of their incomes on tickets.