The practice of dividing property by lot dates back to ancient times. Old Testament scripture instructs Moses to divide the land among the people of Israel by lot. In Roman times, emperors conducted lotteries to distribute property and slaves. Lottery games were popular entertainment at dinner parties and were known as “apophoreta,” or that which is carried home. In addition, Lottery revenues provide state government with an important source of revenue.
Lottery opponents have economic arguments
There are numerous economic arguments against lotteries. Proponents of the lottery say it benefits education, and many state lotteries dedicate some of their profits to K-12 and higher education. Opponents say that the money does not provide more money to education and actually substitutes for general fund dollars that would otherwise be used to finance schools and other important programs. They also claim that lottery players do not always buy lottery tickets from businesses in their neighborhood.
Lottery revenues are a source of revenue for states
The revenue generated by lottery games is used to fund various public programs and to offset the negative effects of gambling. Twenty-three states currently fund programs that combat gambling addiction. According to the National Council on Problem Gambling, two million Americans suffer from gambling addiction and another four to six million are considered to be problem gamblers. Since the lottery was introduced, state revenues from this source of revenue have increased significantly.
Lottery payouts
The distribution of lottery winnings is often described in terms of the percentage of players’ stakes that are returned as prizes. In most cases, lotteries pay out fifty to seventy percent of players’ stakes, with the remainder being used for administration costs, charitable donations, and tax revenues. In gambling terms, these percentages are called “returns to players.”
Pooling arrangements
Lottery pools have two basic characteristics. They are a group activity, in which participants pool their resources in order to increase their chances of winning. When a person wins a lottery, he or she shares that money with the other pool members. Typically, each member of the group contributes a set amount of money, and they agree to split the winnings equally between the members. Each member of the pool agrees to pay a certain percentage of their money to the group, in addition to the cost of buying the ticket.
Fraud concerns
There are plenty of scams and fraud concerns associated with lottery games. In fact, phony lotteries have become a prime target for swindlers. In 2009 alone, 42,000 complaints were filed with the Federal Trade Commission related to phony lotteries. Swindlers have turned their attention to state lotteries, using bogus notifications as a hook to coax lottery winners into handing over money and personal information. Recently, scammers have been sending out bogus notifications to lottery winners, claiming to be winners of the Delaware lottery. This latest scam was discovered in late August and has been reported in other states.