Lottery is a type of gambling in which numbers are randomly drawn and a prize awarded to the winner. Prizes may include cash, goods, services, or public works projects. Many governments organize and conduct a lottery to raise money for public needs. The lottery is often criticized as an addictive form of gambling that can have negative social impacts.

Historically, the casting of lots to determine decisions and fates has long been practiced. In the early colonial era, lotteries were used to fund civic infrastructure projects such as paving streets and building wharves. They were also used to finance universities, including Harvard and Yale. Lottery games continue to play an important role in state economies today.

Most modern lotteries have similar structures: the state establishes a state monopoly to run the lottery; selects a few relatively simple games to begin with; and, as revenues grow, expands the number and variety of available games. Lottery advertising is designed to maximize revenue by persuading targeted groups to spend their money on tickets. These are often lower-income individuals who have a higher risk of gambling addiction and can suffer from the regressive effects of lottery ticket sales.

Some states distribute a significant portion of lottery proceeds directly to education, while others use the money for retail commissions, operating expenses, gaming contractor fees, and direct prizes. The remaining monies are usually spent on other government functions such as business and economic development programs, public health, and natural resources management.