A state lottery is a type of lottery that is organized by the state government. This type of lottery generally increases government revenues after it is introduced. In the early years, state lotteries were essentially traditional raffles. Players could purchase tickets for a future drawing, which was often months away. Later, however, state lotteries began offering instant games. These games had low prizes but high odds of winning.
In 2009, $50.4 billion was spent on state lottery tickets, video kiosks, and prizes. The government pocketed $17.9 billion in lottery profits, spending just over a third of the profits on administration. The remainder of the money went to prizes and commissions to lottery retailers. These numbers show that many people who play the lottery are not from high-income neighborhoods.
While some argue that state lotteries are a form of high-risk gambling, they are a lucrative source of revenue for the states. In fact, these games generate more taxes than corporations do. This makes them a sound financial decision for state governments. However, many opponents of the lottery say that these games are disingenuous and unfair because they rob the poor of their money.
Aside from the prize money, state lottery revenues also go towards operating and advertising costs. In 2010, the state lottery earned $370 per person in Delaware, $324 in Rhode Island, and $314 in West Virginia. This means that even inexpensive tickets can generate serious funds. States like California, Florida, Massachusetts, and New York each collected more than $7 billion in lottery revenues. The New York lottery has recently topped that amount with over $9 billion in total income.