The lottery is a method of raising funds in which tokens are sold and prizes are awarded by drawing lots. The term derives from the Middle Dutch word lot, which probably stems from the Latin word lutor (luck), reflecting the idea that the outcome of a lottery depends on luck or chance. Often, the terms “lottery” and “gambling” are used interchangeably; however, there is a distinction in that with a lottery the money spent on tickets can be returned to the participants in the form of future winnings.
The origins of state-sponsored lotteries go back to the Low Countries in the 15th century, when various towns held public lotteries to raise money for town fortifications and help the poor. During the Revolution, Benjamin Franklin organized a lottery to pay for a battery of cannons to defend Philadelphia against the British. Lotteries grew popular in the 18th century as America’s banking and taxation systems developed and state leaders sought ways to finance everything from roads and jails to hospitals, colleges, and even to build cities and churches.
State lotteries typically win broad public approval because the proceeds are “earmarked” for a specific public good, such as education. Studies, however, show that the lottery’s popularity is not correlated with the state’s actual fiscal condition.
Also, critics point out that while earmarked lottery funds do reduce the amount of general fund appropriations that the legislature would otherwise have had to spend on an item, the resulting appropriation still remains in the hands of legislators who may choose to divert the money to something else.