Lottery is a game of chance wherein people pay a small amount and draw numbers to determine the winner. It is a common source of revenue for state governments and draws widespread public support. Proponents argue that lottery proceeds benefit more people than those who win the jackpot, by allowing states to fund critical public programs without raising taxes. They also contend that the lottery is harmless fun, allowing players to fantasize about what they might do with their wealth even though most understand that the odds of winning are essentially zero.

A state establishes a lottery by legislating a monopoly for itself; hires a public corporation to run it (as opposed to licensing a private firm in return for a share of the profits); begins operations with a modest number of relatively simple games; and progressively expands the portfolio of offerings, often as a result of pressure to generate additional revenues. While the majority of lottery revenue goes to prizes, retailers also receive commissions and bonuses for selling tickets. Typically, about 5% of total revenues go toward promotion and administrative costs.

Critics, however, argue that the lottery functions as a sin tax on the poor. They point out that research shows that lower-income Americans tend to play the lottery more frequently and spend a larger percentage of their income on tickets than other groups. They argue that lotteries prey upon the desperation of people who feel they have been failed by a system that offers few opportunities for economic mobility.