The state lottery is a popular and highly successful form of fundraising in which a large number of tickets are sold and prizes awarded by drawing lots. Since New Hampshire initiated the revival of lotteries in 1964, they have spread rapidly, with 37 states now operating them. Despite the wide variations in the arguments for and against their introduction, state lotteries have developed broad-based support. Lottery supporters claim that proceeds can be used for a specific public good, such as education. This argument is effective in winning and retaining broad public approval, and it may be a major factor in the continued success of lotteries even when state governments are not facing fiscal stress.

However, the existence of a state lottery does not guarantee that proceeds will be used for the specified purpose. In fact, lottery revenues are generally spent on advertising and other operational costs rather than on the intended public benefits. In addition, because the lottery is run as a business aimed at maximizing revenues, it necessarily promotes gambling and thus encourages problem gamblers and other forms of gambling. This has raised serious concerns about the social cost of the lottery and has made some opponents question its appropriate function as a state government activity.

Nevertheless, lotteries have been a popular way of raising money for centuries, particularly in the Low Countries, where they were often used to raise funds for town fortifications and for helping the poor. They also enjoyed considerable popularity in the American colonies, where they were frequently used for financing such projects as paving streets and constructing wharves. In the era of the postwar baby boom, many states adopted lotteries as a means of expanding their range of services without increasing taxes on the middle class and working class. While these developments weakened the arguments against state lotteries, they also accelerated the growth of the industry and created a set of problems that have intensified in recent years.