A lottery is a contest in which prizes are allocated by a process that relies on chance. The prize allocations may be money or other goods or services, including units in a subsidized housing block, kindergarten placements, or even professional sports draft picks. Lotteries are popular among middle-class people, especially men. They are also a significant source of revenue for many governments, which often use the funds for public-service projects or social welfare programs. A large part of the popularity of a lottery stems from the desire for wealth and the sense that, however improbable it may seem, someone must win.

Originally, the word “lottery” referred to an ancient form of divination by drawing lots, but it soon came to mean any sort of distribution of goods or privileges that depended on chance—and in particular, an occurrence characterized by luck and serendipity. The first recorded lotteries were organized to raise money for town fortifications and to help the poor. The term “lottery” is derived from the Dutch noun loter (“fate”) and is related to the earlier Old English verb lotinge, a calque on Middle French loterie, both of which mean “drawing lots.”

There are two broad categories of lottery: those that award cash prizes (called “cash games”) and those that offer other goods or services. Examples of the latter include a lottery for apartments in a subsidized housing complex or for kindergarten placements at a reputable public school. Lotteries are widely used in sports, where they are often used to determine the order in which teams will draft players out of college. They are also common in education, where they are used to decide which students will receive financial aid.

In the United States, state lotteries are regulated by law. They typically draw the majority of their revenues from a small percentage of ticket sales, while the rest goes toward operating costs and marketing. Occasionally, the state may decide to set aside a larger portion of the funds for specific projects.

The earliest lotteries in Europe were organized to raise money for the towns and their walls, but later they came to be a major source of revenue for other public works. In colonial-era America, the lottery was used to fund a variety of projects, including building roads and wharves, and to establish colleges such as Harvard and Yale. In addition, Benjamin Franklin promoted a lottery to finance a militia to defend the city against marauding French forces.

In modern times, the development of state lotteries has followed remarkably similar patterns. The states legislate a monopoly for themselves; establish a government agency or a public corporation to run the lottery; start with a modest number of relatively simple games; and, in response to constant pressure for additional revenues, progressively expand their operations by adding new games. Nonetheless, there are many issues surrounding the introduction of a lottery. For example, the promotion of gambling can have negative consequences for the poor and problem gamblers, while it also raises questions about whether or not the state should be in the business of encouraging people to spend their money on a game of chance.