Lottery involves paying money to have a chance to win prizes in a random drawing, such as a prize for the right number in a game of keno or a jackpot for a video poker machine. Lotteries are controversial because, as government-run businesses, they compete with private enterprises in the market for customers by promoting gambling and using advertising to increase participation. They also raise concerns about problems that may arise when the state promotes gambling and gamblers are not supervised, such as negative consequences for poor people or problem gamblers.

Most states have their own lottery programs. They typically legislate a monopoly for themselves and then create a public corporation to run the lottery. The companies start by offering a few simple games and then — because of the need to generate revenue — introduce new ones on a regular basis. While lottery revenues expand dramatically at first, they eventually level off and begin to decline. This decline, and the need to maintain revenues, drives a constant expansion into new games.

In addition to introducing new games, lotteries also promote themselves by developing extensive specific constituencies, such as convenience store owners (who usually sell tickets); lottery suppliers (heavy contributions to state political campaigns are reported); teachers (in those states in which lottery revenues are earmarked for education); and state legislators (who become accustomed to the steady flow of revenue). In the US, the majority of lottery participants are from middle-income neighborhoods; the poor participate at a much lower rate, which is consistent with a general perception that the lottery is an inappropriate tool for helping the needy.