A lottery is a scheme for allocating prizes, often money, by drawing lots or some other method of random selection. Lotteries have a long history, and the casting of lots for decision-making or divination is well documented in ancient history. However, a lottery for material gain is much more recent, although it has become widespread. Lotteries are also used to raise funds for a wide range of public projects, including roads, canals, and churches. In colonial America, lotteries were important in financing both private and public works, including the construction of Harvard and Yale colleges. Benjamin Franklin even sponsored a lottery to raise funds for cannons to defend Philadelphia during the American Revolution, although it was unsuccessful.

Many states run their own state-sponsored lotteries, which are legalized forms of gambling. Typically, a state legislates a monopoly for itself, establishes a public corporation to run the lottery (or in some cases, licenses a private firm in return for a cut of the profits), and begins operations with a modest number of relatively simple games. Revenues typically expand rapidly after the lottery is introduced, but then level off or even decline, requiring the introduction of new games to maintain or increase revenues.

While the majority of lottery participants are interested in winning a prize, others are merely looking for some extra income. In addition, lotteries can be used to fill in gaps in government budgets. For example, a lottery may be used to allocate kindergarten admissions at a reputable school or a lottery may be held to occupy units in a subsidized housing block. A lottery can even be used to select participants for a clinical trial of a promising drug.

The basic elements of a lottery are a pool or collection of tickets and their counterfoils, a procedure for selecting winners, and some mechanism for recording the identities of the bettors and the amounts they staked. A bettor usually writes his name and the amount he has staked on the ticket, which is then deposited with the lottery organization for shuffling and possible inclusion in the drawing. Computers are increasingly being used to record the identities of bettors, their ticket numbers, and the amounts they have staked.

Most state lotteries offer a variety of different games, from instant-win scratch-off tickets to daily games where players must pick the right numbers. Some of these games have more complex odds than others, but all of them are designed to attract large numbers of bettors and generate enormous amounts of prize money. These high odds have prompted concerns that the games are too addictive and lead to problems for some people. Nonetheless, a number of states are continuing to introduce new games. This is in part because of the high level of demand for lottery tickets, but also because some states are finding that their existing lotteries are not generating enough revenue to cover the cost of operating the lottery. In some states, that has meant increasing the jackpot size or decreasing the odds of winning, a move that can also depress ticket sales.