The drawing or casting of lots as a means of decision-making or (in early use) divination. Now chiefly (by extension): a system of allocation based on chance, as of names or numbers.
Among the most significant problems with lottery policy is that it tends to evolve over time in piecemeal fashion with little or no overall overview. This leads to a situation in which the public welfare is considered only intermittently, if at all, and is usually trumped by the continuing evolution of an industry from which governments profit.
For example, one problem is that many states have developed a dependency on lottery revenues. This creates a dilemma for state officials in which they are caught between the demands of their constituents and the need to maintain revenue streams that are not subject to the pressures of an antitax environment.
Another issue is that lottery money tends to be consumed in the process of organizing and promoting the event. This drains a percentage of the prize pool and often imposes high fees on retailers. In addition, the winners receive a small share of the prize pool that may be less than they might expect based on their ticket investment.
It is not surprising that people with low incomes make up a disproportionate share of lottery players, a group often criticized as a disguised form of taxation. However, there is also a growing recognition that the lottery can have some very positive effects. For instance, a lottery for units in a subsidized housing block or kindergarten placements can help to solve important social problems.