Raising Money With the Lottery

Lottery is a game where participants pay money for a chance to win a prize. The prizes may be cash, products or services. While making decisions and determining fates by the casting of lots has a long history in humankind, the lottery as a method of raising money is relatively new, beginning in 15th-century Burgundy and Flanders with towns attempting to raise funds for fortifications or aiding the poor. Francis I of France permitted private and public lotteries.

In the United States, early lotteries raised funds for paving streets, building wharves, and constructing churches. In 1776 Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British. Privately organized lotteries were also popular in colonial America. They helped fund Harvard, Dartmouth, Yale, King’s College (now Columbia), William and Mary, Union, Brown, and many other colleges.

Almost every state has adopted a lottery. State officials argue that the proceeds benefit a public good, such as education. But they have a hard time explaining how this benefit is derived from the lottery, and the state’s objective fiscal health seems to play only a minor role in the decision to adopt a lottery and the structure of the lottery that results.

While the money raised by the lottery does improve some public services, it is regressive. A portion of the lottery’s revenues is given to a few lucky winners, but much more goes toward marketing and overhead costs for lottery staff and commissions for retailers who sell tickets. It’s important to think carefully about the implications of lottery policies, and to remember that even when you win, winning a lottery is not a guarantee for a better life.