A competition in which numbered tickets are sold and prizes are given to those whose numbers are drawn at random: often sponsored by a state or organization as a means of raising funds.

Lottery participants often view their purchase of a ticket as a low-risk investment. The odds of winning are remarkably slight, but the reward can be enormous. In addition to a one-time payment (cash or annuity), lottery winnings are subject to income tax. The amount of withholding depends on the jurisdiction, but it is normally less than the advertised jackpot.

The most common element of a lottery is some way to record the identities of bettor-staker and the amounts staked; a computer system usually suffices for modern lotteries. A second requirement is some mechanism to pool and shuffle the money bettors have contributed. Finally, a percentage of the total is deducted to cover costs of organizing and running the lottery.

A lottery’s early advocates, Cohen writes, disregarded “long-standing ethical objections.” They argued that since people were going to gamble anyway—on heroin, say—the government might as well pocket the profits. This logic was appealing in a country defined politically by its aversion to taxes.

But it was flawed, too. The high profile campaigns that accompanied the earliest state-sponsored lotteries wildly overstated how much lottery revenues boosted states’ budgets, Cohen writes. In fact, in its first year California’s lottery brought in only five per cent of the state’s education spending.