A lottery is a game of chance in which people pay a small amount to enter and have a chance to win a larger prize. Typically, prizes are cash or goods. Lottery is most commonly organized by state governments, and it is a source of tax revenue for the government. In addition, some states run their own private lotteries to generate revenue for a specific cause or project. Regardless of whether state governments run their own lotteries or license them to private companies, most have the same basic structure: The state legitimises the monopoly; establishes an agency or public corporation to operate the lottery; starts with a modest number of relatively simple games and then progressively expands its portfolio; and raises and distributes proceeds.

Making decisions and determining fates by casting lots has a long history, including several instances in the Bible, but lottery play for material gain is of more recent origin. The earliest recorded lottery was organized by Augustus Caesar for municipal repairs in Rome.

Modern state lotteries are popular with voters and politicians because they provide painless revenue and a way for the public to participate in gambling without having to pay taxes. However, critics point to problems with the way lotteries are run and operated. For example, they argue that lotteries disproportionately target lower-income individuals who are more likely to spend money on tickets despite the low odds of winning and thus can exacerbate existing social inequalities; and that many lottery winners end up losing their winnings because of poor financial decisions or exploitation.