Lottery is an arrangement for awarding prizes by chance. It’s a type of gambling, but it’s also a form of public policy, where people can pool their money for a prize that relies on luck. This arrangement has been used for centuries, with biblical references and Roman emperors awarding property and slaves through it. In the modern era, state lotteries use this same process to offer cash prizes.

Lotteries are usually regulated by governments, with laws prohibiting their promotion outside the state. The earliest state lotteries began in the 1700s, and the Founding Fathers themselves ran a few, including Benjamin Franklin’s lottery to fund Philadelphia’s Faneuil Hall and George Washington’s lottery to fund a road through Virginia’s Mountain Pass. The first lottery games were little more than traditional raffles, where the public bought tickets for a drawing at some future date.

Once the lottery industry became established, however, it took off. Most states now have lotteries, and they all follow a similar pattern: The state legislates a monopoly for itself; establishes a public corporation or agency to run the lottery (as opposed to licensing a private firm in return for a cut of the profits); begins operations with a modest number of relatively simple games; and, due to pressure for additional revenues, progressively expands its offerings.

Lottery profits typically begin to grow rapidly after a lottery’s introduction, but they then level off and may even decline. The expansion into new games is a response to this “boredom” factor, as well as to the fact that state lottery revenues rely heavily on the most committed gamblers—those who spend a substantial share of their incomes on tickets.