Across the country, people spend billions of dollars playing state lottery games. It’s a popular pastime that’s often a good source of leisure income, and it provides an excellent way for players to test their mettle against the odds. But many critics question the wisdom of using lottery profits to fund state budgets, especially since states take a substantial percentage of ticket sales as prize money. They also point to a number of negative impacts of the game, such as its promotion of gambling and its effect on poor people and problem gamblers.

State lotteries began a remarkable revival in the 1960s, and their popularity has continued to rise. Today, 37 states and the District of Columbia have them in operation. They are one of the most successful of all government revenue-raising programs, and they have a wide and growing base of support among the general public. The success of state lotteries has spawned numerous innovations in gambling and gaming, as well as the proliferation of other commercial lotteries.

The term lottery derives from the Dutch noun “lot” meaning fate or chance, and is probably a calque on Middle French Loterie (“action of drawing lots”). The first known state lottery in Europe was organized in the Low Countries in the 15th century; town records from Ghent, Utrecht, and Bruges indicate that this activity was already underway by the end of the 16th century. In the United States, New Hampshire started a state lottery in 1964, and other states followed suit shortly thereafter.

In the early days of state lotteries, they were largely like traditional raffles, with people purchasing tickets for a future drawing, often weeks or months away. But the introduction of innovative new products in the 1970s dramatically changed their nature and the way they are operated, with state lotteries now focusing on generating quick and stable revenues through a variety of instant-games, or scratch-off tickets.

Because of the way they are run as businesses, state lotteries are at cross-purposes with their ostensible purpose of raising money for state budgets. To keep the game appealing, they must pay out a large portion of ticket sales as prizes, which reduces the amount that’s available for appropriations to education, health, and other state needs. Moreover, the relentless focus on advertising to attract ticket buyers tends to promote gambling and is in direct conflict with the stated goals of state legislatures and voters. This puts state lotteries at the center of a thorny political and ethical controversy.