Lottery is a popular form of gambling in which people purchase tickets to win prizes such as cash or goods. It is a big industry in which governments play an important role. States spend upwards of $100 billion on lottery games each year. This amounts to a large share of the money that Americans spend on all forms of gambling and it’s one that state governments promote as a means to fund education, health care, and other services. The issue is whether that’s a good thing and, in any event, how much the revenue from lottery gaming really helps.

In the immediate post-World War II period, when many states were able to expand their social safety nets without imposing particularly burdensome taxes on middle and working class citizens, it seemed reasonable for politicians to rely on lottery revenues. But that arrangement began to break down in the 1970s as inflation and the cost of the Vietnam War increased state spending.

State lotteries typically gain broad public approval when they are marketed as a way to support education or some other specific public service. Interestingly, however, these popular lotteries are not correlated with the objective fiscal health of state government as measured by things like tax rates or budget deficits.

The adoption of lottery games and their subsequent development follows remarkably similar patterns across the country: the state legislature legislates a monopoly; establishes a public corporation or agency to run it; begins with a modest number of relatively simple games; and, under pressure from constant demand for higher revenues, progressively adds new types of games.