Since New Hampshire initiated the modern state lottery in 1964, nearly every state has followed suit. Lotteries differ from traditional raffles and auctions in that the winners are selected by a random process instead of by a winner’s choice or by the best bid. In addition, a cash prize is generally offered and the odds of winning are quite long. If no player wins, the prize rolls over to the next drawing. As such, state lottery revenues usually expand quickly after a lottery’s launch but then level off and may even decline. To maintain or increase revenue, a number of innovations have been introduced to the lottery industry over the years.
There are two main moral arguments against state-run lotteries: one is that they represent a form of “regressive taxation,” arguing that it unfairly burdens those who can least afford to pay (as opposed to a flat sales tax, which would impact everyone equally). The other argument says that people simply like to gamble and that state-run lotteries offer a safe, legal alternative.
Lotteries do indeed have broad appeal, and the fact that they are safer than illegal gambling only reinforces this impression. Moreover, the fact that they are state-run allows governments to cultivate extensive specific constituencies: convenience store operators; lottery suppliers, who often make heavy contributions to political campaigns; teachers (in states in which lottery revenues are earmarked for education); and state legislators, who get accustomed to the extra revenue. But the biggest message that lotteries send is the promise of instant riches in an age of inequality and limited social mobility.