The word lottery has been in the news a lot lately, as people across the country are buying tickets to try to win a few billion dollars. States promote these games to raise money, but it’s important to understand what that means for society at large. This article looks at the big picture: what lottery revenue really does to state budgets, and whether it’s worth the costs of making gamblers subsidize the rest of us.

The casting of lots to determine fate has a long record in human history, but the use of lotteries for material gains is much newer. The first recorded public lottery to distribute prize money was a fundraiser organized by Augustus Caesar for repairs to the city of Rome. A few years later, the Low Countries began arranging such lotteries to raise money for local projects.

Those early lotteries were often held for the benefit of the poor, and prize money might take the form of goods rather than cash. The modern state lottery was born in the immediate post-World War II period, when many states found themselves with larger social safety nets but less tax revenue than before. Some believed that the addition of a state-run lottery would allow them to expand services without onerous taxes on the middle and working classes.

Since New Hampshire began the modern era of state lotteries in 1964, most states have followed suit. Today, they generate a substantial portion of their funding from ticket sales, and they have broad popular support. They also have well-established, specific constituencies: convenience store owners (who sell the tickets); lottery suppliers (whose heavy contributions to state political campaigns are reported regularly); teachers (in states where a large share of lottery revenues is earmarked for education); and state legislators (who quickly become accustomed to the extra income).