A competition based on chance, in which numbered tickets are sold and prizes (usually money) are awarded to the holders of numbers drawn at random. A lottery is usually a public event sponsored by a state or a nonprofit organization. In addition to offering a form of entertainment, it may be an effective way of raising funds for certain public purposes.
Lottery games have existed for centuries. In ancient times, the Romans used them to give away property and slaves. Benjamin Franklin attempted to hold a lottery during the American Revolution to raise funds for cannons. In modern times, the lottery has become a familiar part of the cultural landscape, with 44 states and the District of Columbia running them.
Despite their popularity, however, lotteries face many criticisms. Critics point to the potential for compulsive gambling and alleged regressive impact on low-income communities, among other things. In addition, they argue that the overall economic health of a state is not necessarily related to whether or not it holds a lottery.
In fact, state governments often adopt a lottery as a revenue generator independent of the state’s general fiscal situation. The reason is that the proceeds from a lottery are generally earmarked for a particular purpose, such as education, and therefore tend to win broad public support, especially in times of economic stress or deficits.
The fact that jackpots can grow to staggeringly large sums fuels public interest in the games. The huge amounts generate a great deal of free publicity on news sites and television shows, and in turn attract more players.
Lottery critics also point out that the games tend to rely heavily on high-cost marketing strategies, such as advertising on the front pages of newspapers and magazines. In addition, they allege that the games are rigged by allowing a small percentage of winnings to be paid in a lump sum, rather than over time (and therefore subject to taxation), and by inflating the actual value of jackpot prize money.
Nonetheless, state officials are generally reluctant to abolish their lotteries, even in the face of a growing chorus of criticism. The reasons vary: Alabama and Utah don’t have them, due to religious objections; Mississippi and Nevada are in a race to attract tourists to Las Vegas; Alaska has oil revenues that cushion it against the effects of any recession.
Regardless of the reasons, most people agree that the lottery is an important source of public revenue, and one that should be retained. Nevertheless, there is still much debate about how best to run the lottery and what its impact should be on society. Look up any word, anytime, anywhere on your phone, tablet or computer with the Oxford Advanced Learner’s Dictionary app. Download it for free from the Apple App Store or Google Play. NerdWallet has no financial relationship with any of the companies mentioned in this article. This content is created by a 3rd party partner for NerdWallet.