The casting of lots to make decisions and determine fates has a long history (it is mentioned several times in the Bible). State-sponsored lotteries, however, are comparatively recent. Initially, they were promoted as ways for states to generate revenue without heavy taxation on the middle and working classes.2

This arrangement proved to be successful in terms of generating revenues for the state, but it has also been criticized on other grounds. It has been alleged that lotteries encourage addictive gambling behavior, serve as a major regressive tax on lower-income groups, and generally increase inequality in society.

In most cases, states legislate a monopoly for themselves; establish a public corporation to run the lottery; begin operations with a modest number of relatively simple games; and then, in response to continuing pressure for additional revenues, progressively expand the portfolio of available lottery games. Revenues typically expand dramatically at first, but they eventually level off and may even decline, requiring constant innovation in order to maintain and increase revenues.

There is a basic human desire to gamble, and lottery advertising exploits this. In addition, lottery advertising is effective because people believe that the jackpots advertised on billboards are in fact real. Moreover, people feel that there is no other option for them other than to play the lottery. This combination of factors explains why the lottery is so popular, even in states where the financial health of the government is not especially high.