Lottery is a form of gambling that involves paying an entry fee for a chance to win a prize, such as cash or goods. Prizes are generally awarded by drawing lots, though some lotteries use a random number generator or other method to select winners. In addition to the winning participants, the lottery has a number of other stakeholders, including convenience store operators (who collect commissions on tickets); suppliers of the prizes (heavy contributions by these companies to state political campaigns are frequently reported); teachers (in those states in which a portion of the revenue is earmarked for education), and state legislators (who quickly become accustomed to the extra income).

While the casting of lots to determine fates or property distribution has an ancient history (see, for example, the biblical Old Testament passages regarding land inheritance), the modern lottery was first organized in the 15th century. Early lotteries were typically based on a public prize of money, with tickets sold for a drawing that was usually weeks or months in the future. Since the 1970s, however, many innovations have dramatically transformed lottery games. For example, scratch-off tickets and keno have rapidly expanded the number of available games with smaller prizes but much higher chances of winning. These innovations also have accelerated the rate of growth in lottery revenues.

Lotteries have become a common way to raise funds for everything from road construction and state employee salaries to education and public housing. The lottery is also a popular fundraising tool for churches, schools, and charitable organizations.

In the United States, most state governments offer some form of lottery. In addition to traditional drawings in which numbers are drawn for a prize, some states run instant games in which players may pick a series of symbols on a playslip. Instant games have a shorter time period in which winners are announced, but still require the payment of a small entry fee.

As with other forms of gambling, the lottery attracts criticism for its effect on compulsive gamblers and its regressive impact on low-income communities. Critics have also questioned whether lottery proceeds are being spent wisely.

Despite these criticisms, the lottery continues to enjoy broad popular support. While the state may be able to rely on lotteries as a source of revenue, it must continually monitor and reform its games in order to maintain this support. As the lottery evolves, debate and criticism often shifts away from its overall desirability to specific features of its operations, such as the possibility of an addictive nature and its regressive effects on lower-income communities. The result is that few if any states have coherent “lottery policies.” Instead, the industry is driven by market forces and by the continual evolution of new games and innovations. As a result, most lottery officials make policy decisions piecemeal and incrementally. This has led to a situation in which the lottery is now an integral part of the state economy.