Although making decisions and determining fates by casting lots has a long history in human society (see, for example, the biblical Book of Numbers), state lotteries are a relatively recent development. States first introduced them in the immediate post-World War II period, largely because they sought a new source of painless revenue. They were hailed as a way to finance state services without raising onerous taxes on middle- and working-class citizens.

In virtually every state where a lottery has been established, the adoption of the lottery has involved a vote by both the legislature and the general public. And in every state where the lottery has been adopted, the arguments for and against its introduction have followed remarkably similar patterns. The structure of the resulting state lottery and its evolution have also been quite similar, in that the state legislates its own monopoly; establishes a separate agency to run it (as opposed to licensing a private firm to run it in return for a share of the profits); begins operations with a modest number of fairly simple games; and then, faced with continual pressure for additional revenues, progressively expands its scope.

One common argument in favor of a lottery is that it helps to finance certain favored public purposes, such as education. This argument is particularly effective when state governments face financial stress and the prospect of increased taxes or cuts in favored public programs. But the evidence suggests that this effect is largely a product of political manipulation, as studies show that lottery popularity does not seem to be related to the actual fiscal condition of the state government.

A second important factor in the growth of lotteries is their appeal as a game of chance. The overwhelming majority of people who play the lottery do so for the hope that they will win, and they spend considerable sums in pursuit of that goal. While there are many ways to play the lottery, scratch-off tickets are the most popular form, and they offer low ticket prices and relatively high chances of winning. These features make the tickets attractive to a broad range of players, and scratch-offs have especially strong appeal among the poor, who tend to play the lottery in greater numbers than other groups.

Finally, a third important factor in the growth of lotteries has been their capacity to generate enormous jackpots. As jackpots grow, more and more people buy tickets, which inevitably drives up prize amounts. In addition, when a large amount of money is at stake, the news media tends to focus on the story. As a result, lottery jackpots are now routinely in the millions of dollars. This dramatic growth in prize money has been accompanied by an explosion in consumer spending, and it has contributed significantly to the growing prosperity of lottery participants. This prosperity is particularly evident in the poorest areas of cities, where lottery spending per capita is typically higher than in other parts of the city.