What is a Lottery?


The word lottery can mean any competition that depends in part on chance. A common example is a competition for subsidized housing units or kindergarten placements. But it can also refer to a contest that dish out prizes ranging from money to cars or houses. In the latter case, the prize allocation is based on chance, but the later steps of the contest require skill.

A central element of all lotteries is the drawing, a procedure for selecting winning numbers or symbols. Often, the tickets or counterfoils are thoroughly mixed by some mechanical means before the drawing. Then a number or symbol is chosen at random from among those drawn. Computers are increasingly being used for this purpose, and their capacity to store information about large numbers of tickets is a big advantage.

Many states run lotteries to raise money for public programs. In 2004, forty-four states and the District of Columbia operated lotteries. The state governments hold the exclusive right to operate a lottery, and their profits are largely used for education and other government purposes. Most state lotteries are administered by a commission or board, which is staffed by employees who work under the direction of the governor.

Lottery enthusiasts can purchase tickets at various outlets, including convenience stores, gas stations, restaurants and bars, religious and fraternal organizations, service stations, and newsstands. The ticket prices vary, but most are relatively low. Lottery mathematics indicates that buying more tickets will not increase the chances of winning, but some people buy them anyway because of the entertainment value and fantasy of becoming rich. Their purchases cannot be rationally justified under decision models based on expected utility maximization, but such individuals may find that the pleasure and excitement they get from lottery playing is worth the investment.