A lottery is a scheme for the distribution of prizes by lot or chance. Traditionally, such a scheme involved drawing lots to determine the winners of specific prizes, typically money. More recently, the term has been extended to include a system for the allocation of anything whose success depends on chance or fate. For example, students are sometimes selected for a program by lottery, and life is often seen as a lottery: one has to wait and see what happens.

Many states sponsor public lotteries to raise funds for a variety of projects, such as building roads and schools. In colonial-era America, for instance, a number of churches and universities were built with lottery funds. George Washington even sponsored a lottery to help finance the construction of a road over the Blue Ridge Mountains.

To attract and keep customers, a lottery must have a sufficiently large prize pool to justify the purchase of tickets. In addition, the lottery must have a mechanism for recording and verifying the identities of bettors and the amount they stake. A percentage of the total sales is usually deducted as costs and profits for the lottery organization, leaving a remainder to be awarded as prizes.

As the popularity of the lottery grows, states face new challenges in promoting and controlling the game. In addition, some state officials are concerned about the effect of increased ticket sales on other forms of gambling, particularly illegal games.