A form of gambling in which numbered tickets are sold and prizes are awarded according to a random selection. Lotteries are usually sponsored by governments as a means of raising funds for public projects.

The drawing of lots to make decisions or determine fates has a long history in human culture, as documented by several ancient documents, including the Bible. More recently, the practice has been used to raise money for public and private purposes. The first recorded lotteries to offer ticket sales and prize money appeared in the Low Countries in the 15th century. Some towns began holding public lotteries to build walls, town fortifications, and provide aid to the poor. Others supported a wide variety of other private and public ventures, such as churches, colleges, canals, roads, bridges, and wars.

Despite these widespread applications, critics of lotteries focus on a number of specific features of the operations. They argue that lottery advertising is often deceptive, frequently inflating the probability of winning and eroding the real value of the prize; that the money won through lotteries is not actually tax-free (since the winners must pay taxes on the prizes before they can withdraw them); that a large portion of the proceeds normally goes to organizing and promoting the contest, while the remainder is available for the prize pool; and that lottery games tend to encourage addictive behaviors.

In the United States, a state-sponsored lottery is a legal way to raise money for a variety of public and charitable purposes. Generally, the state establishes rules and regulations for the game and supervises its operation. Licensed retailers sell the tickets, which can be purchased at various outlets, including convenience stores, banks, nonprofit organizations (such as churches and fraternal organizations), service stations, restaurants and bars, bowling alleys, and newsstands. Many of these outlets also offer online services.

Lottery revenues have proven to be an effective source of revenue for a variety of state activities, including education, health care, and infrastructure projects. Lottery profits have also been useful in meeting the need for additional revenues without increasing the burden on taxpayers. This success has created a growing interest in adopting similar models in other states.

A major argument used to promote lotteries is that the revenue generated by the games is “painless” for the government because it is a source of “free” public money, rather than requiring a tax increase or cutting popular programs. This argument is especially appealing in times of economic stress, when voters might be tempted to view a lottery as an alternative to paying higher taxes or making painful program cuts. However, studies have shown that the popularity of lotteries is not a function of their perceived fiscal soundness.