Various state governments have embraced lotteries to raise money for public projects. They usually start with a state-legislated monopoly; a government agency or public corporation runs the lottery rather than licensing a private firm in return for a portion of the profits; and they start with a modest number of relatively simple games, gradually expanding their offerings to attract new players and increase revenues. These expansions often include the addition of new types of games, including video poker and keno.
Traditionally, the casting of lots to determine fates or wealth has a long history in human culture, but public lotteries distributing material prizes have only been around for a few centuries. The first recorded state-sanctioned lottery was held in Bruges, Belgium, in 1466 to repair municipal streets.
A key element of a lottery is a mechanism for pooling money paid as stakes in different tickets. This is accomplished through a hierarchy of sales agents who pass the money up through the organization until it reaches the ticket-holders. Normally, a proportion of the prize pool goes as costs and profit to the lottery, and a further percentage is available for winners.
Revenues typically expand dramatically when a lottery is introduced, then level off and sometimes decline, requiring the introduction of new games to maintain or increase ticket sales. The popularity of super-sized jackpots helps to drive these efforts, as these drawings earn the games a windfall of free publicity on news sites and newscasts.