Lottery is an example of how public policy is made piecemeal and incrementally, with little consideration for the overall implications of decisions. Once a lottery is established, state officials must continually evolve the operations of the system in order to maintain or increase revenues, as well as address other concerns that arise, such as problem gambling and regressive impact.

Historically, many states have used lotteries to raise money for various purposes, including paving streets and building wharves. The lottery was a major source of revenue for the colonies and provided funding for buildings at Harvard, Yale, and other institutions. George Washington even sponsored a lottery to help fund the construction of a road across the Blue Ridge Mountains, but the effort failed.

The first state-sponsored lotteries were held in the Low Countries in the 15th century, with records from cities such as Ghent, Utrecht, and Bruges showing that towns offered tickets to win money or goods. These early lotteries were very similar to modern ones: citizens purchased tickets for a drawing at a future date, often weeks or months away.

Today, 44 of the 50 states and the District of Columbia have state-sponsored lotteries. The reasons for this popularity vary, but typically lotteries are able to sustain broad popular support because they can claim that the proceeds will benefit a specific public good, such as education. However, this claim has not proved to be correlated with the actual fiscal situation of the state government, as the lottery has been popular even in states with healthy budgets.