The lottery is a procedure for distributing something, often money, among a group of people by lot or chance. It is a form of gambling that is legal in many countries. People purchase chances, called tickets, by paying a small sum of money for the opportunity to win a larger amount of money. The chances of winning the largest prize are based on the total number of tickets sold and the frequency with which the ticket is purchased.

The word lottery is probably from the Dutch noun lot, meaning fate, but it may also be a calque of Middle French loterie or a diminutive of Old English latterie, “action of drawing lots.” Lotteries became popular in Europe in the 17th century and were promoted as a painless form of taxation. The oldest running lottery is the state-owned Staatsloterij in the Netherlands, established in 1726.

Lotteries have grown rapidly since the 1960s and are a major source of funding for public expenditures. State governments typically legislate a monopoly for themselves, establish a state agency or corporation to run the lottery (as opposed to licensing a private firm in return for a share of the profits), and begin operations with a modest number of relatively simple games. As revenues expand, the lottery progressively introduces new games to maintain and increase its popularity.

Although a wide variety of social, economic, and ethical concerns have been raised about lotteries, they have not prevented their widespread acceptance and expansion. The broad appeal of lotteries is based in part on the fact that proceeds are often used to finance a specific public good such as education. Research suggests, however, that the objective fiscal circumstances of a state have little impact on whether or when it adopts a lottery.