The lottery is, as the title suggests, a way for state governments to raise money by selling tickets with numbers that people have chosen. The winners are then selected by chance. While some critics worry that it encourages irrational spending habits, the fact is that the vast majority of lottery players do not treat it as a serious bet on their financial future. In fact, most states, including New Hampshire and New York, use the lottery to supplement their revenue streams.
The earliest American lotteries, Cohen writes, were “a rare point of agreement between Thomas Jefferson and Alexander Hamilton,” who understood that people would prefer a small chance of winning something substantial to paying taxes for a greater likelihood of receiving little. Early America also grew increasingly tax-averse, and lotteries served as an attractive alternative to draconian measures such as raising rates and cutting services. Many of the nation’s first church buildings and universities, for example, were financed in part by lotteries.
After a few years of success, however, many lotteries began to stagnate, which led to increasing competition from other states and growing concerns about the ethical and social consequences of gambling. With so much at stake, states shifted their attention to ways of improving profitability, experimenting with more complex games and adding more lottery prizes. To attract new players, they also increased prize sizes and started advertising their games on billboards. This shift in emphasis produced a second set of problems.