What Is a Lottery?


A lottery is a contest that gives prizes to participants based on a random process. A common example is a state-run competition in which you pay money for a chance to win a large sum of cash. But a lottery can also refer to any kind of contest where prizes are allocated using a random process, from the choice of jury members to kindergarten placements in a certain school. Regardless of what type of lottery you participate in, the key to winning is deciding whether the non-monetary benefits—entertainment value and social status—outweigh the disutility of losing money.

People in the United States spend $100 billion on lottery tickets every year, making it the most popular form of gambling. State lotteries promote themselves as ways to raise revenue that don’t put a big dent in state budgets, and the idea of winning a jackpot is enough to lure in many people. But this arrangement doesn’t necessarily benefit all citizens equally.

The two most common forms of the lottery are scratch-off games and daily number games, which involve picking numbers. The former is the bread and butter of lottery commissions, accounting for between 60 and 65 percent of all sales nationwide. But this type of game is extremely regressive, meaning that it mostly attracts lower-income players. By contrast, the more prestigious powerball and mega million games are less regressive, but they don’t pull in much revenue from poorer communities. These games are the ones that generate most of the headlines and get a windfall of free publicity on news sites and television.