Lottery: how the business works

Lotteries are the most widely played form of gambling and the most tightly held by the state. In most countries the national lottery is a monopoly, run by a state company or by a private operator under a long licence, and a large share of the money goes to good causes or the treasury.

How a lottery makes money

A draw game pays a fixed share of ticket sales into the prize fund, often around half; the rest covers good causes or state revenue, retailer commissions, operating costs and the operator's margin. Draw games therefore keep a far larger share of stakes than casino games, and their appeal rests on the size of the top prize. Our sister site Odds of the Draw shows the exact odds of each prize tier.

Products

Draw games: national lotteries, multi-country games and daily draws.
Instant games: paper scratch cards and their digital versions, which play much faster.
Lottery betting: operators take bets on the result of an official draw instead of selling tickets, legal in some markets and banned in others.
Couriers and ticket resellers: services that buy official tickets on a customer's behalf, regulated in some countries and banned in others.

Suppliers

A small group of suppliers provides lottery systems, terminals and instant ticket printing to state lotteries worldwide, and several of the largest operators run lotteries in many countries under licence.