Lotteries are gambling games that award prizes based on chance. Prizes can be anything from goods and services to cash, houses, cars, vacations, and even slaves. The drawing of lots to determine ownership or other rights has a long history, and the modern lottery dates back to the seventeenth century when King James I of England established a lottery to finance the settlement of Jamestown in Virginia. State governments have since passed laws granting them the sole right to run lotteries, and today in the United States there are forty-four state lotteries (the District of Columbia included).

Lottery revenues often grow rapidly after a lottery’s introduction, then level off or even decline. To maintain or increase revenues, lotteries continually introduce new games. Many of these innovations are small changes in the rules of a game; others are major marketing initiatives, such as merchandising deals with sports teams and companies that provide products as prizes.

A key factor in a lottery’s public approval is the degree to which it is perceived to benefit a particular public good, such as education. This argument is especially effective in times of economic stress, when it can offset fears of tax increases or cuts in other government programs. But research suggests that the objective fiscal circumstances of a state do not significantly affect whether or when it adopts a lottery.

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