The lottery is a form of gambling in which prizes are awarded on the basis of chance. Lotteries are often run by government or private entities and are characterized by their high prize amounts. A prize in a lottery may be anything from goods and services to cash or property. The first state-sponsored lotteries began to appear in Europe in the early 16th century. The word lotteries is derived from the Middle Dutch word lot, meaning “fate” or “chance.”

Cohen begins with a nod to lottery’s early history, but then focuses on its modern incarnation, which began in the nineteen-sixties when growing awareness of all the money to be made through numbers games collided with a crisis in state funding. With inflation and the costs of the Vietnam War soaring, it became increasingly difficult for states to balance their budgets without raising taxes or cutting essential services, both options that would inflame antitax sentiment among voters.

The basic requirements for running a lottery are relatively simple. First, there must be some method of recording the identities of bettors and the amounts they stake. Normally, bettors sign their names on a ticket or a receipt that is deposited with the lottery organization for subsequent shuffling and possible selection in a drawing. Modern lotteries are largely computerized and record bettors’ identifying information electronically.

Second, the prize pool must be large enough to attract participants and sustain a profitable operation. The bulk of this money goes to pay expenses and profit to the lottery organizer, and a percentage is typically set aside for the prize winners. Potential bettors are attracted to large prizes, but demand also exists for smaller prizes (which encourage them to wager again in the next drawing).