The casting of lots for decisions and fates has a long history in human society, and the lottery is the latest variation on the theme. It involves a payment of a consideration (money, work, property) for the chance to receive a prize of equal value for an uncertain outcome. Although making decisions by lottery has been used since antiquity, it gained wide popularity during the 17th century in Europe, where Francis I of France authorized state-sponsored lotteries.

In the modern sense of the term, state lotteries raise money to provide a range of public usages, including education and infrastructure. In the United States, where state-sponsored lotteries were first established in 1964, the proceeds from these activities generate billions of dollars in annual receipts. This is a significant source of revenue for the government, especially in an era when budget deficits are a concern.

A key factor in determining whether and when state governments establish lotteries is the extent to which lottery revenues are seen as benefiting some specific public good, such as education. However, the actual fiscal circumstances of a state do not appear to have much influence on whether or when a lottery is adopted. As a general rule, state lotteries enjoy broad public approval regardless of the fiscal health of a state.

Once a lottery is established, debate and criticism often shifts from its general desirability to alleged negative impacts such as the targeting of poorer individuals, the promotion of compulsive gambling, and its regressive impact on lower-income groups. Lotteries are run as a business, and advertising necessarily focuses on persuading people to spend their hard-earned money on the chance to win big.