How the Government Funds the Lottery


A lottery is a game of chance in which you purchase numbered tickets in order to win a prize, typically money. Lotteries are government-sponsored and regulated, and they have been around for a long time, with the first known ones appearing in the Low Countries in the 15th century for such purposes as town fortifications and aiding the poor.

In the early United States, lotteries played a significant role in public works financing. They helped finance roads, canals, bridges and the foundation of Columbia and Princeton Universities. But they also got tangled up in the slave trade. Necromancers and witches used them to select bones or other objects for their talismans, and George Washington managed a lottery whose prizes included human beings (though he later regretted his involvement).

The modern lottery system has grown into a carefully curated sector of the national government that funds more things than you might think. The way it operates is quite simple: You hand cash or a ticket to a retailer, and that gets added to a pool of money for future drawings. If nobody wins, the jackpot rolls over to the next drawing, and the prize pot grows even larger.

State governments use the money they collect from these ticket sales to pay out the winnings, cover operating costs and advertise the lottery. This can add up to a serious sum: Last year, New York brought in $370 per capita, Rhode Island $324 and West Virginia $314. That doesn’t include the money that goes to retailers, which often sell tickets for multiple lotteries at once.