A lottery is a form of gambling in which numbered tickets are sold and prizes are awarded to the holders of winning numbers drawn at random. It is often used as a method of raising funds for a public purpose, such as providing money for education or other state services. In the United States, state governments establish and operate lotteries and collect all profits. Lottery proceeds are viewed by some as an alternative to taxes, and many state officials have advocated expanding the use of this type of gambling to raise more revenue for their states. However, there is little evidence that more lotteries would improve state finances. In fact, it is clear that lotteries tend to generate more problems than they solve.

State governments established their lotteries in response to popular demand and because they viewed them as a way to raise money without the burden of collecting taxes. During the antitax era of the 1950s and 1960s, politicians saw lotteries as a relatively painless tax, allowing people to gamble for a cause they believed was worthwhile while avoiding an immediate cash outlay. However, since then lottery revenues have become increasingly reliant on the continuing growth of new games and have eroded the ability of state governments to manage their gambling operations.

As the number of available games grows, ticket sales rise, but the percentage of proceeds that goes to costs and profits increases as well. The result is that more and more of the prize pool is devoted to covering costs, leaving very small prizes for winners. Moreover, the reliance on a few large jackpots stokes a sense of excitement among potential bettors, but it also masks the lottery’s true nature as a form of gambling that imposes large costs and high odds of winning on the majority of players.

In addition, the reliance on new games has led to a rapid increase in player turnover. While 50 percent of Americans play the lottery at some point, only about 16 percent of them are “frequent players,” buying a ticket at least once a week. These players are disproportionately low-income, less educated, and nonwhite.

Despite the problems that have arisen, most states continue to offer lotteries. This is due largely to the fact that they can be operated piecemeal by a variety of state agencies, thereby limiting the scope of their influence and reducing the likelihood that they will be exposed to general public pressures to change their policies. This is a classic case of policy making on an incremental basis, with the end result that few states have a coherent gaming or lottery policy.