A competition in which numbered tickets are sold for a prize, typically money, and the winning numbers are drawn at random. Lotteries are a popular means of raising money for public projects. They are also an important form of gambling. The term “lottery” usually refers to a state or national lottery, but may also be used for other, private competitions based on chance. In colonial America, lots were a common way to finance both public and private projects, including paving streets, building churches, and establishing colleges. Benjamin Franklin even sponsored a lottery to raise funds for cannons to defend Philadelphia against the British.

The history of lotteries is long and varied. They were among the earliest forms of gambling, and they are still very popular in many countries. The drawing of lots to determine fates and fortunes has a very long record in human history (there are even a few instances recorded in the Bible). But the use of lotteries for material gain is only slightly more recent, being first documented in the Low Countries in the 15th century. The earliest records of lotteries offering tickets for prizes were found in town records in Ghent, Utrecht, and Bruges.

When a lottery is established, debates and criticism tend to focus on specific features of the operation, such as the problem of compulsive gambling and its alleged regressive impact on lower-income groups. But the underlying arguments remain consistent, both in support and opposition to state-sponsored lotteries.

Lottery supporters argue that they are a necessary source of revenue for states. They contend that taxes on consumption, especially in high-income states, are rising and that lotteries are a relatively painless way for state governments to raise needed money. They also claim that the money raised is earmarked for a particular public good, such as education, and that this ensures the integrity of the lottery. The truth is that the objective fiscal circumstances of a state do not appear to have much influence on whether or when it adopts a lottery, or on how often people play.

State lotteries were introduced in the United States in the mid-20th century, with New Hampshire leading the way in 1964. They grew rapidly, and today they are found in 37 states and the District of Columbia. Although critics have argued that they do not provide adequate revenue, their popularity continues to be unquestioned by most voters. But the growth of lotteries is not a simple matter of demand meeting supply, and the nature of lottery revenues has changed in recent years. Revenues initially expand rapidly, but then level off or even decline as interest wanes. To maintain their popularity, state lotteries have been introducing a variety of innovative games. Several have involved scratch-off tickets, which allow players to enter without the need for a special machine. These have tended to offer smaller prizes, but the odds of winning are considerably higher. This has generated considerable controversy.