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Lottery Innovations

While making decisions and determining fates by the casting of lots has a long history (it is even mentioned in the Bible), lotteries offering tickets for sale with prizes of material goods are much newer, dating from the 15th century, when various cities held public lotteries to raise funds for town fortifications, help the poor, etc. The earliest known state lottery, organized by Augustus Caesar for municipal repairs in Rome, offered “articles of unequal value.”

Lottery games typically take the form of a traditional raffle, with participants buying tickets in advance of a drawing that takes place weeks or months later. Revenues usually expand rapidly after the launch of a lottery, but then plateau and begin to decline. To maintain or increase revenues, lotteries must introduce new games.

One such innovation was the introduction of scratch-off tickets, which eliminate the need to wait for a drawing and allow players to choose their own numbers. Another was the expansion of game formats to include keno and video poker. Finally, there is the option to buy a ticket in which a computer randomly selects the winning numbers.

These innovations have not eliminated criticisms of lottery operations and policies. Critics charge that lottery advertising often mispresents odds of winning, inflates the value of prizes (lottery jackpots are usually paid out in equal annual installments over 20 years, with inflation and taxes dramatically eroding the value), encourages compulsive gambling, is harmful to low-income groups, and is generally at cross-purposes with general state policy goals.