Lottery is an arrangement by which prizes are allocated by chance to one or more people. This is contrasted with gambling, in which a payment of some consideration (property, work, or money) is required for a chance to win a prize. Lotteries can be held for any purpose, but in modern usage they are typically used to raise money for public or private purposes. Examples of such purposes include military conscription, commercial promotions in which property is given away through a random process, and the selection of members of a jury by lottery.

In most modern states, lottery participation is voluntary and regulated by law. Prizes may range from small items to large sums of money. The odds of winning are determined by a combination of factors, including the number of tickets sold and the rules of the particular lottery. Although the lottery is a form of gambling, its promotion by state governments has been controversial because it encourages people to spend money that they might otherwise save or invest. Critics charge that lottery advertising is often misleading and tries to deceive the public by inflating the odds of winning the jackpot, inflating the value of the prize money (because of taxes and inflation, the actual amount won is significantly less than the advertised figure); describing the jackpot as an “eternal” sum of money that will last forever; and so on.

Since New Hampshire introduced a state lottery in 1964, the states have followed remarkably similar paths: establishing a monopoly for themselves; setting up a state agency or public corporation to run the lottery (as opposed to licensing a private firm for a share of the profits); starting with a modest number of relatively simple games; and progressively expanding their operations in response to pressure from the public and from their own internal lobbying efforts.

Whether the jackpot grows to apparently newsworthy levels or not, the popularity of the lottery has become one of the most important sources of tax revenues in the United States and many other countries. In addition, lottery advertising is a major source of revenue for television networks and sports leagues.

Lotteries have long been a popular form of entertainment. They date back to ancient times. In fact, several instances are recorded in the Bible of making decisions and determining fates by casting lots. The earliest publicly known lottery in the West was for municipal repairs in Rome in 1466. In colonial America, a variety of lotteries were sanctioned by the state for both private and public ventures. Benjamin Franklin sponsored a lottery in 1744 to raise funds for the purchase of cannons to defend Philadelphia against the British. George Washington held a lottery in 1768 to raise money for a road across the Blue Ridge Mountains. Many other cities and states operated lotteries during this period as well. In the 18th century, lotteries were commonly used to finance schools, canals, roads, and other public works projects.