A lottery is a scheme for allocating prizes by chance. It may be a gambling game where bettors pay for numbered tickets and hope to win a prize if their numbers are drawn at random, or it may be a system for allocating something, such as units in a subsidized housing block or kindergarten placements at a public school. In the former case, a jackpot is built up until someone wins; in the latter, if no one wins the prize rolls over to the next drawing and can be quite substantial.
The word lottery is probably derived from Middle Dutch loterie, which was itself a contraction of Old English lotinge, “action of casting lots”. In its earlier sense it meant simply the act of throwing or drawing lots, but it came to be used as a synonym for any scheme or method of allocation by chance, and in this sense it is still often employed; see, for example, the phrase in the Old Testament, “The LORD will do what is good for you.”
Modern state-sponsored lotteries typically feature multiple categories of prizes. They often use a centralized computer system to record the names and amounts of money staked by each bettor and to select winners. Alternatively, each bettor may write his name on a ticket that is then deposited with the lottery organization for shuffling and possible selection in the drawing. The latter procedure is called a drawing or a selection, and it is designed to assure that only chance determines the winning entrants.
In the course of a drawing, winning entries are selected by some mechanical means, such as shaking or tossing. Computers have become increasingly popular for this purpose, because of their capacity to store large quantities of information about a great many tickets and to generate random numbers or symbols. In any case, the entrants must be thoroughly mixed before they can be extracted; this is another safeguard against chance becoming tainted by bias or other factors.
Because the odds of winning are so much lower than those of losing, most people are willing to hazard small sums for the chance of a big gain. This has led to a wide acceptance of the lottery as a legitimate form of raising revenue for public projects without the stigma attached to a direct tax.
It is important to understand that a portion of the proceeds from lottery sales is used to distribute prizes, and this reduces the percentage of the total receipts that are available for government purposes such as education. In addition, the fact that consumers aren’t always clear about the implicit tax rate of lottery receipts tends to erode public support for the practice. This has been especially true during periods of economic stress. In some states, it is even required by law that a certain percentage of the total revenue be paid out in prizes. This is a serious drawback, because it can distort the political support for a lottery.
