How the Lottery Works



In the United States, lotteries are run by state governments. These government-run lotteries operate monopolies, and they use the profits from their sales to support various programs. As of August 2004, there were forty states with active lotteries. As of June 2011, approximately 90% of the country’s population lived in a state that operated a lottery. Any adult who lives in that state may purchase a lottery ticket.

In the early years, most lotto games were passive drawing games that required players to wait for weeks to find out if they won the lottery. The passive drawing games were the predominant type in the 1970s, but they had virtually disappeared by 1997. As the popularity of the lottery increased, consumers began demanding more exciting games. Today, many states offer a variety of lottery games, ranging from penny to 99 cents.

According to the Council of State Governments, lotteries are administered by state lottery boards. The exceptions are Connecticut, Georgia, Kentucky, and Louisiana, which use a quasi-government lottery corporation to operate the lottery. However, the amount of oversight varies by state. For example, in New York, the lottery is run by a state-run lottery board, while in Louisiana, it is run by a quasi-governmental corporation.

After the Civil War, lotteries became popular in southern states, such as Louisiana. In 1868, the state legislature granted permission for the Louisiana Lottery Company to operate. In return for operating the lottery, the company agreed to donate $40,000 to a charity hospital in New Orleans. The company was also allowed to keep all the lottery revenue and pay no state taxes. The Louisiana lottery soon became popular across the country and brought in more than 90% of its revenue from out-of-state players. It also returned a profit of 48% to its operators.