The drawing of lots to determine ownership or other rights has a long record in human history, including several instances recorded in the Bible. Lotteries in the modern sense of the word began to develop in Europe in the fifteenth and sixteenth centuries, raising money for town improvements and public works projects. They spread to the United States in 1612, when King James I of England established a lottery for the benefit of the settlement at Jamestown, Virginia. State governments took over the operation of lotteries after that time.

Lottery games attract customers primarily by offering big prizes that create excitement and interest. In addition, some percentage of the prize pool is reserved for organizational costs and profits, and ticket sales are deducted from that amount. This leaves the top prizes for winners, and there are usually multiple winners. Super-sized jackpots are a popular feature of many lotteries, because they draw the attention of news media and increase the chances that the winnings will be carried over to the next drawing.

Research suggests that lottery players are predominantly middle-class, and that they tend to play frequently. However, there is no definitive proof that people from poor neighborhoods are disproportionately less likely to play the lottery. Clotfelter and Cook suggest that state governments that run the lottery as a business and focus on maximizing revenues have a tendency to promote gambling at cross-purposes with the larger public interest. They argue that this creates serious problems for low-income families and problem gamblers.