Lottery, a form of gambling in which many people purchase chances for winning money or prizes (such as subsidized housing units, kindergarten placements or hospital admissions) by the casting of lots. The casting of lots to make decisions and determine fates has a long record, including several instances in the Bible, but the distribution of lottery tickets for material gain is relatively new.

A public lottery is a contest in which prize money — a combination of cash and goods or services — is awarded to winners who select the correct numbers in a drawing of those that have been submitted by ticket holders. A common method of conducting a lottery involves selling tickets for a fixed price and selecting the winning numbers by chance; other methods involve a random selection process that includes a computer. Prizes are typically based on the total number of ticket sales, although some are predetermined, and additional proceeds are deducted for promotional expenses and taxes.

The popularity of lottery games is largely due to the high profit margins associated with them, which have encouraged states to offer a variety of different types of games. Once established, a state lottery monopolizes the operation of its game, selects a public corporation to run it and often begins with a limited number of simple games. As revenue growth has slowed, however, many lotteries have expanded in size and complexity to attract consumers and increase revenues.

The lottery is often promoted as a low-risk investment because the initial odds are quite favorable, even for non-winners. However, lottery players as a group contribute billions to government receipts that could be used for other purposes such as retirement or college tuition.