A lottery is a competition in which numbered tickets are sold and prizes awarded to holders of tickets that match a random set of numbers. Lottery games are widely used as a way to raise money for public and private enterprises, with the prize money often earmarked for specific purposes. Unlike other forms of gambling, which are often seen as harmful, the lottery is widely popular with the public and the vast majority of players do not consider themselves compulsive gamblers.
Lotteries first became widespread in the United States with the establishment of the New Hampshire state lottery in 1964, and their introduction has since been replicated in almost every state. Despite their enormous popularity and apparent success, lotteries continue to face substantial criticism. Criticisms of the regressive impact on low-income communities, for example, have become a central feature of discussions of state lottery policy.
In addition, many people have criticized the advertising tactics of state-run lotteries, which are often criticized for misleading consumers. For example, critics point out that lottery ads frequently present unrealistic odds of winning, inflate the value of the money won (because prize payouts are typically made in annual installments over 20 years, inflation and taxes dramatically erode their current value), and other issues.
The fact that a large percentage of the winnings from a lottery are awarded to people in lower income brackets has also long been a source of controversy. Clotfelter and Cook note that the popularity of a state lottery does not seem to be related to the objective fiscal circumstances of a state government, and that even when a lottery is introduced in a state that has no pressing need for additional revenue, its operation still generates significant political support.