The State Lottery


The drawing of lots to determine ownership or other rights has been practiced throughout history. In colonial America, lotteries played a major role in funding towns, wars, colleges, and public-works projects. George Washington even sponsored a lottery to raise funds for cannons to defend Philadelphia during the Revolutionary War. Today, state lotteries are a common feature of American life. Nearly every state has one, and, in total, they raised $17.1 billion in 2006.

State lotteries are popular: More than 60 percent of adults say that they play them. The most popular forms of state lotteries are daily numbers games and scratch-off tickets. They tend to attract middle-income patrons. But researchers find that low-income patrons do not participate at rates much higher than their percentage of the population. As a result, lotteries may be operating at cross-purposes with the general welfare.

Lottery revenues typically expand dramatically at first, then level off and even decline. To maintain or increase revenue, lotteries must introduce new games and more aggressively promote them. They also must compete with casinos and commercial advertising to win consumers’ attention.

Many states advertise a particular brand or product as the top prize in their scratch-off games. A Harley-Davidson motorcycle was a top prize in the New Jersey Lottery’s “Scratch & Win” game in 2008. In addition, lotteries often team up with sports teams or other companies for merchandising deals that benefit both parties through product exposure and promotion.

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