A competition based on chance, in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random. Lotteries are generally run by state or local governments, although private organizations can also hold them. Prizes may be money or goods.

In colonial America, lotteries were used to finance roads, canals, churches, and colleges, among other public works. In the 1740s, for example, New York’s lotteries helped finance the foundation of Columbia University. Lotteries are sometimes criticized for promoting gambling, but the casting of lots for decisions and fates has a long history (see lottery).

Since state lotteries first emerged in the 1960s, they’ve been a major source of revenue for state governments. They are widely viewed as a way to fund government services without raising taxes. However, the evidence suggests that they actually have a regressive impact on low-income residents, because most players and revenues come from middle-income neighborhoods.

State officials often promote the lottery as a way to reduce the burden of taxes on working families, and they use the proceeds to improve education and social programs. But the evidence shows that these benefits are largely offset by losses in sales tax revenues, property taxes, and business investment. Moreover, the lottery’s regressive effect is obscured because many of its promotional messages promote the idea that it is fun and exciting to play. These messages encourage people to play, and they can lead to irrational behavior by committed gamblers, such as chasing past jackpots or purchasing multiple tickets.