Lottery is a game in which participants pay a small amount of money (usually a dollar or two) for the chance to win a larger sum of money. The first recorded lotteries occurred in the 15th century in the Low Countries—Ghent, Bruges, and Utrecht—to raise funds for town fortifications and to help the poor. Since then, the practice has spread throughout the world.
People play lottery games for entertainment value, or non-monetary benefits such as a sense of belonging to a group or the thrill of making a fast buck. If the disutility of a monetary loss is outweighed by the utility of the non-monetary gain, playing the lottery may be a rational decision for a particular person.
When a person wins, the winner can choose whether to receive a lump sum or an annuity payment. In the United States, the annuity option is generally much smaller than the advertised jackpot, because of income taxes and other withholdings.
The wealthy, of course, buy fewer tickets than the poor; they spend, on average, one percent of their annual income on tickets. But they also spend a much higher percentage of their income than the middle class and working class, which means that they are the main source of revenue for state governments.
Moreover, rich people tend to buy more tickets per household than the poor, and they are more likely to be members of syndicates. A syndicate is a group of people who purchase large numbers of tickets together, which increases the chance of winning but reduces the payout.