A lottery is an arrangement by which people can win prizes in return for paying for a chance to participate. The prizes may be goods, services, or cash. Lotteries are legal in most countries. Some governments regulate the games and oversee the awarding of prizes. In other cases, the winners are determined by a process that relies on chance. Examples include a lottery for units in a subsidized housing block and kindergarten placements at a particular public school.
During the late 15th and early 16th centuries, cities in Burgundy and Flanders used lotteries to raise money to fortify their defenses or help the poor. In the 17th century, colonial America had a variety of state-sanctioned lotteries. Private lotteries were common as well. Many of the nation’s colleges, including Harvard, Dartmouth, Yale, and King’s College (now Columbia), were financed by lotteries.
Lotteries appeal to a deep human desire to be lucky. They dangle the promise of instant riches, particularly in an age of inequality and limited social mobility. But they also promote gambling, which can have a number of adverse effects on the poor and problem gamblers. They can also run at cross-purposes with the state’s objective fiscal health, as Clotfelter and Cook point out. Nonetheless, they enjoy broad popular support.