Official lottery is a government-sponsored game of chance. Typically, players pay for a ticket and then either choose numbers or play keno or other games where the winnings are determined by chance. Lotteries are often popular because they promise large cash prizes, but they can also be dangerous, especially for vulnerable populations.

The modern state-run lotteries began in the nineteen-sixties, when growing awareness of all the money to be made in gambling collided with a financial crisis in many states. Faced with rising inflation and the cost of the Vietnam War, state governments found it impossible to balance their budgets without raising taxes or cutting services. The idea that the lottery could generate huge amounts of revenue seemed like a solution to this problem, Cohen writes.

But the reality is that lottery profits are only a tiny fraction of a state’s budget. The majority of state lottery funds go toward advertising, salaries for lottery managers, and the commission’s administrative costs. The rest is distributed to players as prizes. Because lottery money is earmarked by law for a particular purpose, legislators have less incentive to raise other kinds of taxes, and voters are not as angry at politicians who need to raise taxes when they know that the earmarked lottery funds will continue to flow in.

In this sense, the lottery is a classic example of an “innovation in the marketplace that has reshaped state policy in profound and unintended ways.” This story was originally published in the June issue of Harper’s Magazine.