A competition based on chance in which numbered tickets are drawn at random and prizes awarded to the holders. It is especially popular as a method of raising money for public purposes and for giving away large cash prizes. Lotteries may be legal or illegal and may involve a wide range of prizes, from units in a housing development to kindergarten placements. In the United States, most state governments operate a lottery.

Lotteries gain broad support from the argument that they provide funds for a specific public purpose without raising taxes or cutting social safety net programs. However, research shows that the objective fiscal circumstances of a state do not significantly influence whether or when it adopts a lottery. Moreover, it is not clear that a lottery will raise enough money to cover all the costs associated with its operation.

In addition to the prize money, a percentage of the total amount paid for tickets is normally deducted for administrative costs and for profit for the organizer. A choice must also be made about the size of the prize pool—whether to offer few large prizes or many smaller ones.

The message that most lottery promoters convey is that playing the game is fun and easy. This appeals to people who play for the gratification of scratching off a ticket and winning a small prize, but it obscures how much of their incomes committed gamblers spend on tickets. It also ignores that most of the money spent on tickets is devoted to the very slim chance that they will win the big jackpot.