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The word “lottery” derives from Middle Dutch lotinge, meaning to draw lots (see sense 1a). The first state-sponsored lottery was held in the Low Countries in the seventeenth century, where ten shillings could buy you a chance to win town fortifications or a charitable cause. The lottery was popular, and politicians viewed it as a way to raise funds for services without hiking taxes or cutting programs—choices that would likely have proved unpopular with voters.
Lotteries grew in popularity across the American colonies, and they were used to fund everything from civil defense to the construction of churches, colleges, and universities. Harvard, Yale, and Princeton were all financed in part through lottery proceeds. Benjamin Franklin ran a lottery to fund cannons for the Philadelphia militia, and George Washington ran a lottery to fund his Mountain Road project in Virginia (though that one failed).
Today’s state-sponsored lotteries vary in form but all have one thing in common: they are based on chance. Ticket holders submit a small number of numbers or letters, and winners receive prizes ranging from cash to goods. In the past, prize money was often a fixed percentage of total receipts. Today, most states have a multi-state lottery system, and the prizes tend to be larger. As with the early days, lotteries are a popular source of revenue for state governments.