We’ve all dreamed about what we would do if we won the lottery. For some, it’s immediate spending sprees, for others it’s buying a luxury car or paying off mortgages or student loans. Some people even dream about a retirement plan or investing the money in real estate. Whatever the fantasy, there’s no denying that lotteries are big business. Americans spend about $100 billion per year on tickets. State lotteries are a thriving industry in the United States, though they’re not without controversy. Critics accuse them of misleading the public, presenting odds of winning as greater than they actually are; inflating the value of jackpot prizes (most lotto prizes are paid out in equal annual installments over 20 years, and inflation and taxes dramatically erode their current values); and promoting gambling as an attractive source of “painless” revenue for governments.

The history of lotteries in the United States is a story of growth and decline, as well as public policy, economics, and human nature. They began as private games run by entrepreneurs, who used them to attract customers and raise capital for new ventures, such as shipping ships into the Virgin Islands or building a road over a mountain pass in Virginia.

In the modern era, lotteries are mainly operated by states that grant themselves the sole right to operate them, a monopoly they use to generate funds for government programs. While lottery profits provide a source of revenue for some state governments, they also impose considerable costs on society and create moral hazards for those who play them.