Lottery is a form of gambling wherein participants pay to purchase tickets and are awarded prizes if their numbers match those randomly drawn by machines. Lotteries have a long history and can be traced back to ancient Rome and Renaissance Europe. Today, state and provincial governments and private businesses operate lotteries. They are a controversial part of American culture and a multi-billion dollar industry. This article takes a closer look at three significant problems that plague lottery games: 1) The inability to distinguish between gambling and other forms of play; 2) The potential for negative social impacts (including increased wealth inequality and problem gambling); and 3) The fact that lottery winners often lose their winnings through poor financial decisions or exploitation.

The modern era of state-sponsored lotteries began in 1964 when New Hampshire legalized the practice after a nationwide ban. Since then almost all states have adopted lotteries. State lotteries are remarkably similar in the ways that they develop and operate. They begin with a legislative monopoly; establish a public corporation to run the operation; begin operations with relatively modest numbers of relatively simple games; and – under constant pressure for additional revenues – continue to expand in size, complexity and offerings.

These common features suggest that the states’ adoption of lotteries is not necessarily tied to their actual fiscal health and that there are factors beyond the state’s finances that motivate state officials to introduce and promote them. It is important to consider these questions, particularly as lottery advertising increasingly targets lower-income individuals with messages promoting the illusion that they can afford to “get rich quick.”