Lottery is an arrangement in which prizes, either in the form of cash or goods, are awarded by chance to ticket holders who match certain combinations of numbers. The prize fund can be a fixed amount or, more commonly, a percentage of the receipts from ticket sales. In the latter case, the organizers run the risk that not enough tickets will be sold, and they may have to refund some of the prize money.
The first public lotteries were probably held in the fifteenth century in Burgundy and Flanders, where towns used them to raise funds for town fortifications or to help the poor. Francis I of France attempted to organize the first French state lottery in 1539, but it failed.
In colonial America, private and local lotteries were common as a mechanism for raising money for both commercial and civic ventures. For example, a 1744 lottery helped fund the construction of Princeton University, while the Continental Congress organized a lottery to raise funds for the Revolutionary War.
The modern incarnation of the lottery, Cohen argues, began in the nineteen-sixties when growing awareness that there was big money to be made in gambling collided with a crisis in state funding. The cost of social safety net programs, coupled with population growth and inflation, was outpacing state revenues. Politicians faced the difficult task of balancing state budgets without raising taxes or cutting services, both of which were extremely unpopular with voters.