The use of lots for making decisions and determining fates has a long record in human history. There are dozens of examples in the Bible, and lottery-type games were popular at Roman banquets as a way to give away property and slaves. However, the first lottery to distribute prize money was established in Bruges in 1466 for the announced purpose of aiding the poor. The name “lottery” probably derives from the Middle Dutch word lotje, which is a diminutive of the Old French noun lot (“fate”) and is itself a diminutive of the Latin word lupus.
State-sponsored lotteries have gained widespread popularity since New Hampshire launched the first modern lottery in 1964. They are a major source of revenue for states, which can provide education, veterans’ benefits, and other programs without raising taxes on the general public. The lotteries have also developed broad constituencies, including convenience store owners (who sell the tickets); lottery suppliers, who make heavy contributions to state political campaigns; teachers, in states where a portion of proceeds is earmarked for education; and, of course, the people who play the games.
While some of the money is paid out as prizes, most is used to pay the administrative costs of running the lottery, such as paying commissions to retailers and paying salaries for lottery officials. A small percentage is usually set aside to fund gambling addiction programs and other state programs. The rest of the money is spent on advertising, which has a strong impact on players’ perception of their chances of winning.