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The first modern government-run lotteries emerged in the nineteen-thirties. In the midst of a nationwide tax revolt, which would ultimately cut state funding by over sixty per cent, these games seemed like an answer to the inescapable problem of how to pay for state services without raising taxes or cutting them to a level that would enrage voters.

Lotteries grew in popularity as states struggled with the costs of war, welfare, and public works projects, especially road construction. The Continental Congress used a lottery to fund its early military campaigns, and Benjamin Franklin endorsed one to help Boston’s Faneuil Hall. In addition to helping with capital expenses, lotteries could also provide a steady stream of revenue for the government.

As the demand for lottery tickets grew, so did the jackpots. This was a result of a simple economic principle: People are willing to risk small sums for large rewards. When the jackpots reached a size that made them newsworthy, they boosted sales. They also enticed a torrent of free publicity for the games, which helped boost the popularity of their numbers and symbols.

Despite all this, critics complained that lottery proceeds were inherently unequal and dangerously addictive. Lottery advocates argued that a lottery was not gambling because winners could choose between a lump sum payment and an annuity that yielded a smaller amount over time, even before income taxes were applied.