The word lottery is a calque on Middle Dutch loterie, meaning “action of drawing lots” or “fateful event.” The first state-sponsored lotteries were held in the Low Countries in the 15th century for purposes such as building town fortifications and helping the poor. But the concept of a random allocation of prizes based on chance is much older: ancient inscriptions found in Egyptian tombs refer to the drawing of lots to determine rights to property.

America’s lottery industry has become one of the most lucrative in the world. Americans spend more than $80 billion a year on tickets, and that figure is rising rapidly. The money goes to many different causes, but mostly to support state governments, which use it to fund a wide array of programs that range from infrastructure to social safety nets and wars.

States’ initial enthusiasm for lotteries was due to the belief that they would bring in large amounts of revenue without imposing onerous taxes on the middle and working classes. This arrangement worked well for a while, but in the 1960s inflation began to accelerate and it became increasingly difficult for states to meet their budgetary obligations.

Moreover, it is becoming clear that the bulk of lottery revenues come from a relatively small segment of the population. Lottery players are disproportionately low-income, less educated, nonwhite, and male. Their play is rational because the entertainment value of winning a big prize outweighs the disutility of a monetary loss.