A lottery is a contest in which people buy numbered tickets and winners are determined by drawing lots. These are often run by states or organizations as a means of raising funds. They may be designed to give away cash prizes or goods, services, or land. A lottery can also be used to determine who is a candidate for military conscription, commercial promotions in which property is awarded by drawing lots, and the selection of jurors from lists of registered voters. The term derives from the Greek word lot
There are many kinds of lotteries, but all involve payment for a chance to win a prize. Traditionally, the prizes were of a monetary nature, but now they can be goods or services. Modern lottery games are typically operated by state governments, although private firms may be licensed to operate them. There are also international lotteries, which have no connection to national or state governments.
The basic features of a lottery are that it must have some mechanism for recording identities, amounts staked, and the numbers or symbols on which money is bet. It must also have a way to record the results of each drawing. Some lotteries require that bettor names be written on the tickets, others allow for a number to be deposited with the lottery organization and then re-shuffled for later selection in the drawing. In addition, there must be a means for determining how much of the total pool is used for expenses and profits, and how much to allocate for prizes.
A fifth element is a system for dividing the prize pool into a fixed number of categories. Some lotteries offer a single prize of a large sum, but most distribute prizes in a series of increasing categories, with the top prize being the biggest. Lotteries must also have a system for determining the frequency and size of each prize, and they must be able to handle changes in demand or the economic environment.
Some states have laws regulating the operations of their state lotteries, and most have a law prohibiting interstate gambling. The laws vary from one to the next, but most state lotteries follow a similar pattern: the state legislates a monopoly for itself; it establishes a public agency or corporation to run the lottery (instead of licensing a private firm for a percentage of the profits); it begins with a modest number of relatively simple games; and, under constant pressure for additional revenues, it progressively adds new games.
There is considerable controversy over the desirability of a lottery, particularly whether it exposes players to compulsive gamblers and has a regressive impact on low-income neighborhoods. However, the popularity of state lotteries is so great that legislators in most U.S. states have continued to adopt them despite such concerns. In fact, the growth of lottery revenues has outpaced that of other sources of gambling revenue. Thus, the question is not whether a lottery should exist but rather what role it should play in state budgets.