In a lotteries, people pay for the opportunity to win prizes based on random chance. Prizes range from goods and services to money, with the amount of the prize based on how many numbers match the winning combinations. Examples of a lottery include a drawing to determine the number of units in a subsidized housing block or the placement of kindergarten students at a reputable public school.
The lottery is a major source of government income in most states and it has broad popular support, even in times of economic stress. Moreover, state governments can argue that lottery proceeds help promote specific public goods such as education, a claim that is often effective at winning over the public.
But the promotion of a gambling activity can conflict with the proper role of a state government, and this is especially true when a lottery involves public funds. It is also difficult for state governments to manage an enterprise from which they profit when the objective fiscal condition of a government becomes worse, as has been the case in many states since the introduction of lotteries.
Most modern state lotteries are patterned after the model pioneered in New Hampshire in 1964, with the public purchasing tickets for a drawing to be held at a future date. Revenues typically expand rapidly after a lottery is introduced, but then tend to level off and even decline as the public grows bored with the game. In order to maintain or increase revenues, lotteries must continually introduce new games to keep the public interested.