Traditionally, lottery winners win a fixed amount of cash or goods. The prize may be offered by the organizer or, more often, a percentage of total ticket receipts. Organizers must risk a certain amount in order to guarantee a payout, but the system still allows for a high degree of flexibility – for example, many lotteries offer multiple prizes and can award varying amounts of money based on how many tickets are sold.

Despite the skepticism of critics, which came from both sides of the political aisle and across social classes, state governments adopted lotteries. But they did so under a false assumption: that the games would fill state coffers without increasing state taxes and, therefore, keep the state’s hands off the pocketbooks of average citizens. This premise proved false, and the lottery, as Cohen shows, has been an extremely inefficient source of revenue for state governments.

The era of the modern lottery began in 1964, with New Hampshire’s approval of its first game and 13 more states following suit within a few years. As Cohen explains, the move came as a time of fiscal crisis, when state budgets were stretched thin by expanding services and inflation, the costs of wars, and a growing population. States sought to balance their books without raising taxes or cutting services, which proved unpopular with voters. In the nineteen-sixties, America’s tax revolt reached a critical point. By the late twentieth century, federal funds flowing into state coffers had begun to decline.