When a state conducts a lottery, it raises money by selling tickets with numbers on them. The numbers are then chosen by chance and those with the winning numbers receive a prize. The prizes can be cash or goods. In some lotteries the prizes are fixed amounts of money, and in others they are a percentage of the total receipts. The latter format often involves some risk to the organizers if insufficient tickets are sold to cover the prize fund.
Lotteries have long attracted public support because they offer a means of raising money for state projects without the stigma attached to a levy on the general population. In the American Revolution Benjamin Franklin used a lottery to raise funds for cannons to defend Philadelphia against the British.
However, when the growth of lottery revenues began to plateau in recent decades, concern about their regressive impact on lower-income communities rose. Critics pointed to the fact that the bulk of players and proceeds came from middle-income neighborhoods, while high-income and low-income areas were largely excluded.
Then there are concerns about the effectiveness of marketing, which frequently uses misleading and exaggerated information to promote the lottery. They also object to the fact that lotteries develop very specific and powerful constituencies, including convenience store operators (the typical vendors); suppliers to the lottery; teachers (in states in which lottery revenues are earmarked for education); state legislators; and other special interests whose influence grows in proportion to their contribution to lottery revenues.