A game in which numbers are drawn at random, and the holders of tickets win prizes, often money. Lotteries are commonly organized by state governments, but may also be private. The term is used figuratively as well, to describe any situation or undertaking that relies on chance, such as deciding which judges will be assigned to a case.

The history of lotteries in the Western world is relatively recent, although making decisions and determining fate by casting lots has a long record going back to biblical times. The first recorded public lottery to offer tickets was established in the 15th century, when a series of towns in the Low Countries began selling them for raising funds for town improvements and helping the poor.

Since then, a number of states have adopted lotteries as a source of revenue. They generally establish a state agency or public corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits), start with a small set of fairly simple games, and then gradually expand the range of available options. Most modern lotteries offer a variety of games such as scratch-off tickets, keno, and video poker. They are characterized by high prize amounts and the relatively large odds of winning.

Despite the widespread popularity of state-run lotteries, they have not proved to be a panacea for generating state government revenues. For one thing, it is quite difficult to generate consistent and stable lotto revenue through an ongoing campaign of promotional efforts. Rather, revenues tend to increase rapidly after the launch of a lottery, then level off and sometimes decline. To maintain or increase revenues, lottery officials must constantly introduce new games.

In addition, studies have shown that lottery participation is skewed among the population. The majority of participants are drawn from middle-income neighborhoods, while the proportions of those from high- and low-income neighborhoods is much less than their percentages in the general population. This raises concerns about the social costs of promoting gambling.

State lotteries are also subject to a range of ethical and legal problems. Many critics charge that lottery promotions are deceptive, presenting misleading odds information and inflating the value of the cash prizes offered. In addition, the promotion of a lottery can lead to the problem of addiction and the misallocation of resources; and there are also questions about whether it is an appropriate function for a government to engage in the commercial marketing of gambling.