What Makes a Lottery Fair?

The lottery is a game of chance in which participants pay to participate and are awarded prizes based on the number or combination of numbers they select. Prizes can range from cash to goods or services, such as apartments in subsidized housing developments or kindergarten placements. Some states run state-sponsored lotteries, but others organize private, charitable lotteries. In the United States, state-run lotteries are legal and are typically regulated by laws prohibiting the sale of tickets to minors or to foreign nationals. In addition to the money awarded for winning, a portion of the ticket sales is usually used for administration and publicity.

The first recorded lotteries to offer tickets with a cash prize were organized in the Low Countries in the 15th century as a way to raise funds for town fortifications and the poor. But people have been playing for money for far longer than that. The earliest records are of keno slips from the Chinese Han dynasty (205 and 187 BC) and drawings of wood in the Chinese Book of Songs (2nd millennium BC).

There are a number of things that make a lottery game fair. One is that the prizes are randomly distributed, so that all ticket holders have an equal chance of winning. A second requirement is that the amount of the prize be proportional to the number of tickets sold. This is often achieved by dividing the total prize pool by the number of tickets in the drawing. The result is that larger prizes are awarded for fewer tickets than in the case of smaller prize pools.

Another important thing that makes a lottery fair is the procedure for selecting winners. To ensure that this is random, all the applications must be thoroughly mixed. This may be done manually by shaking or tossing them, or more recently by using a computer. After the application rows and columns are mixed, they are rearranged in an order that is random. Each row or column is then assigned a color, with the number of times each application was awarded the prize in that position. If the colors appear to be relatively similar, it is a good indication that the lottery is unbiased.

Some people purchase a lottery ticket for a non-monetary benefit, such as the entertainment value or a sense of excitement that they will get from playing the game. In these cases, the expected utility of the monetary loss is outweighed by the entertainment value or other benefits of the ticket, making it an acceptable decision for them.

But the majority of people purchase a lottery ticket for a monetary gain. Whether this is because of the sliver of hope that they will win, or because they feel it is a part of their civic duty to help the state, people are willing to spend $50, $100 a week on these tickets. These are committed gamblers, not casual players. And they do so despite the fact that their odds of winning are bad.