A lottery is a game of chance in which a small number of participants pay a sum for a chance to win a large prize. The term also refers to the process of drawing lots to determine various events, such as unit placements in a subsidized housing block or kindergarten enrollment. Financial lotteries are usually organized by state or federal governments.

The concept of using the casting of lots to make decisions and to determine fates has a long history in human society. However, a lottery in which participants buy tickets for the opportunity to receive material goods is much more recent. The first known public lottery to award prize money was organized in the Roman Empire to finance municipal repairs. In the 17th and 18th centuries, lotteries were popular in Europe and the American colonies. Benjamin Franklin ran one to raise funds for a battery of guns to defend Philadelphia and John Hancock ran a lottery to help rebuild Faneuil Hall in Boston.

Before the 1970s, state lotteries resembled traditional raffles, with the public buying tickets for a drawing scheduled for some future date, often weeks or months away. Innovations in the 1970s, though, changed the lottery landscape dramatically. New instant games (such as scratch-off tickets) sparked enormous growth in ticket sales. By reducing the purchase time and cost to play, these innovations were a powerful draw for people who had not previously considered lottery playing.

As a business enterprise, the lottery aims to maximize revenue. As a result, it must advertise to attract new customers. Critics charge that many lottery ads are deceptive, promoting the illusion of high winning odds (which are in fact quite low) and inflating the value of money won (a lotto jackpot prize is usually paid in equal annual installments for 20 years, with inflation dramatically eroding its current value).