The idea of making decisions and determining fates by the casting of lots has a long history in human culture—and in the Bible. But the first recorded public lotteries with tickets for sale and prizes in cash are from the Low Countries of the 15th century. These were intended to raise money for town fortifications and the poor, and they were popular.
Lottery commissions have long argued that their games are good for the state, that they are a painless source of revenue that is not as onerous as taxes. But this is a false argument. It hides how much people lose and the regressivity of lottery proceeds. It also obscures how many people play the lottery and spend a significant part of their incomes on tickets.
A more accurate way to think of lotteries is as games that pay out a fixed percentage of the total amount of money received by the organizers. The prize may be a cash amount, goods or services, or a percentage of the total receipts. A percentage prize is more common, as it enables the organizers to spread the risk of low ticket sales.
In the United States, lottery revenues typically expand dramatically shortly after a state introduces its first game and then level off and sometimes decline. To combat this trend, the industry has resorted to innovation—adding new games and changing existing ones. This approach may not be foolproof, but it is certainly effective at increasing ticket sales and retaining current players.