Official lottery is state-sponsored gambling wherein the prize — cash or goods — is a percentage of total ticket sales. It is not to be confused with raffles, wherein the prize is determined before all tickets are sold. State governments create their own lotteries and govern them separately from other state government functions, though they often cooperate with each other to organize consortium games spanning larger geographic footprints. The two biggest games — Powerball and Mega Millions — serve as de facto national lotteries because they are offered in most states.
In America, the lottery emerged in the nineteen-sixties when rising population, inflation, and war costs converged with a crisis in state funding. It became impossible for many states to maintain existing services without raising taxes or cutting programs, both of which were highly unpopular with voters. To avoid the unpleasantness of a tax increase, politicians turned to the lottery, which promised to generate hundreds of millions in revenue seemingly out of thin air.
These campaigns were extraordinarily effective, but also misguided. For one thing, they wildly inflated the impact of lottery money on state finances. In California, for example, where a high-profile campaign touted the lottery as a boon to education, it turns out that, in its first year, lottery proceeds covered only about five per cent of the total K-12 budget. Furthermore, as with most commercial products, lottery sales are sensitive to economic fluctuations; they increase as incomes decline and unemployment rises.