Lottery is a game of chance in which people purchase tickets and prizes are allocated by random drawing. Prizes are usually cash, but can also be goods or services. Some governments regulate state lotteries and tax the proceeds. Others do not. Regardless of whether it is played for fun or as a way of winning a fortune, lottery games are popular and contribute billions in revenue to society each year.

The earliest European lotteries were a form of entertainment at dinner parties, with ticket holders receiving fancy items like dinnerware instead of a fixed amount of money. Later, Roman emperors used lotteries to distribute slaves and land. The modern American state lottery owes its origins to New Hampshire in 1964, but has since spread to most states.

After state lotteries are established, debate and criticism typically shifts from the desirability of a lottery to specific features of its operations. Typical topics include the problem of compulsive gambling and a perceived regressive impact on lower-income groups. In addition, lottery critics often point to the exploitation of convenience store operators (lottery revenues are usually channeled to them); vendors and suppliers who are heavily lobbied by lotteries; teachers, in states where lottery profits are earmarked for schools; and even lawmakers who become accustomed to additional government revenue.

Lotteries are typically organized as pools of money, from which a percentage is used for operating and promotional costs and the remainder is distributed to winners. Choosing to offer fewer large prizes or more smaller ones can significantly impact the size of the pool, and it is also important to consider whether the prize pool should be limited to cash prizes or include some non-cash awards.