A lottery is a system for allocating prizes to individuals by chance. It can be a form of gambling or a method for raising money, such as for public charitable purposes. The practice of distributing property and other goods by lot dates back to ancient times, and several biblical examples have been recorded. Roman emperors gave away slaves and property through the lottery, as did British colonists during the American Revolution. Benjamin Franklin ran a lottery to raise money for cannons for defense of Philadelphia against the French, and George Washington used one in his attempt to build a road over a mountain pass.

States adopt a lottery when they believe it will bring in more revenue without imposing especially onerous taxes on middle-class and working-class citizens. That belief explains why state lotteries tend to draw more players and revenues from middle-class neighborhoods than from lower-income areas. In addition, the number of winners from low-income neighborhoods is far smaller than their proportion of the total population. This means that a substantial portion of the profits from a lottery are siphoned off from poorer neighborhoods, even when the average prize is small.

While the popularity of a lottery has a lot to do with its ties to a state’s objective fiscal health, Clotfelter and Cook point out that it is also based on voters’ desires for more state spending and politicians’ desire for easy sources of tax revenue. The latter point is reinforced by the fact that, when a lottery is introduced in a state, it is almost always accompanied by a referendum on whether or not to continue it.