The official lottery is the gambling operation run by a government for the purpose of raising money. Lottery proceeds are used for state purposes, such as public education and infrastructure. In many states, the state lottery is regulated by statutes governing the operation and accounting of the games; the distribution of the proceeds; time limits for claiming prizes; and activities considered illegal (such as selling tickets to minors). In addition, most state lotteries are subject to laws regarding fraud, forgery and theft.
The history of state-run lotteries is a rocky one. They were once seen as a silver bullet for balancing state budgets, but in the nineteen-sixties, they were sunk by a growing awareness of all the money to be made and the political climate’s aversion to taxation. Suddenly, it was impossible for state governments to balance their budgets without either raising taxes or cutting services, which were extremely unpopular with voters.
In colonial America, the first modern lotteries flourished. In the seventeenth century, they were used to fund everything from roads and canals to churches and colleges. Harvard, Yale and Princeton were financed partly by them. In the French and Indian War, lotteries helped to pay for munitions and local militias. But the Puritans hated gambling, viewing it as a dishonor to God and a doorway to worse sins. Its defenders argued that people would gamble anyway, so why not let the state pocket the profits? This argument had its limitations, but it gave moral cover to those who approved of the idea.
By the nineteenth century, the social and religious sensibilities that eventually led to prohibition were turning against gambling of all kinds. Corruption also played a role, with lottery organizers sometimes taking the money and never awarding prizes.
While the lottery’s popularity waned in the early twentieth century, the lottery was still a viable source of revenue for states with a conservative politics. In the late nineteen-thirties, however, rising inflation and a swelling population combined to make it increasingly difficult for state governments to balance their budgets without increasing taxes or cutting services.
As a result, in the late twentieth-century, a growing number of states legalized their lotteries. They started by arguing that the money would go toward a line item that was popular and nonpartisan, such as education or elder care. This narrow approach made it easier to sell the lottery, and it ensured that a vote for the lottery was not a vote against government services.
New York’s lottery is not immune to this trend, but it has a unique feature that allows winners to remain anonymous. A lawyer named Robert Jaffe has forged an arrangement with the lottery that will allow winners to form an LLC, which can shield them from the public. He has helped at least a dozen lottery winners do this, and he is trying to get the law changed permanently. The proposal won’t be considered by the state Legislature until next year at the earliest.