A lottery is an arrangement in which tokens (usually tickets) are sold and prizes are awarded according to a process that relies on chance. Prizes may be money or goods. Modern lotteries are often government-sponsored, though private companies also promote and run them in some countries. The first recorded lotteries were held in the Low Countries in the 15th century to raise funds for town fortifications and the poor. The word is derived from the Latin lotto, meaning fate or luck.

Lotteries have broad appeal as a form of entertainment, because of their large prizes and relatively small costs. They are easy to organize, convenient for players to play, and can be used to fund a wide variety of projects. In addition, they are popular with the general public and are often a source of tax revenue. The lottery is one of the oldest forms of gambling, and it is still a common feature of many cultures.

The history of the lottery is rich and varied. It was used for religious, military, political, and commercial purposes throughout ancient times. For example, the Old Testament instructed Moses to divide land by lot, and Nero gave away slaves and property during Saturnalian feasts. Modern lotteries have an even wider range of uses. They are used in the distribution of rations during wartime, for commercial promotions, and for selecting jury members. The practice of distributing goods or services by lottery has long been controversial, with some people asserting that it is unjust and repressive to the poor.

In the United States, state lotteries are regulated by law. Typically, the state establishes a monopoly for itself; sets up a state agency or public corporation to manage the lottery; and begins operations with a modest number of relatively simple games. To maintain or increase revenues, the lottery is continually expanded by adding new games. In recent years, there has been a dramatic shift toward instant games, which require less administrative work and have smaller prizes but still offer substantial cash rewards.

As with all gambling, there are ethical concerns involving the lottery. While some critics argue that the money raised by the lottery is being misspent, the vast majority of players are honest. The lottery is also a major contributor to problem gambling, and there is little evidence that it reduces compulsive gambling.

The lottery has gained broad popularity in the United States in part because of its role as a socially desirable alternative to raising taxes or cutting government programs. It is also a way to fund the activities of nonprofit groups. In addition, the lottery is an attractive alternative to other forms of fundraising because it requires only a modest amount of capital up front and has relatively low operating expenses. Moreover, studies show that the fiscal condition of the state does not appear to affect lottery approval. Instead, the primary reason for approval seems to be a state’s perceived commitment to a specific public good, such as education.