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. State governments promote lottery games as a way to raise money for a wide range of public purposes. Despite the popularity of these games, they remain controversial in many respects. The principal argument supporting their adoption by virtually every state has been that they provide a source of “painless” revenue: people spend money on tickets and the states reap profits without raising taxes. However, the success of state lotteries has been accompanied by numerous problems.
In general, lottery purchases cannot be justified by decisions based on expected value maximization. The purchase of a ticket involves the risk that one will not win, and even if the odds of winning are incredibly high, the prize for matching five out of six numbers is usually only a few hundred dollars. Instead, people buy lottery tickets for the thrill and fantasy of becoming wealthy, or for other non-monetary benefits.
Because lotteries are run as businesses, with a focus on maximizing revenues, advertising necessarily focuses on persuading people to spend their money. This has a number of problematic consequences, including the promotion of gambling to vulnerable groups (such as the poor) and problem gamblers, and it can be at cross-purposes with the larger public interest. The issue of whether or not state lotteries serve a legitimate purpose is thus still very much in question.