A lottery is an arrangement in which prizes are allocated by a process that relies wholly on chance. This is contrasted with the allocation of money or goods by a process that also involves some degree of skill. It is a common form of gambling in which participants pay an entry fee to win a prize. The earliest examples of lotteries date to ancient times. One biblical example has the Lord telling Moses to divide property among the people of Israel by lot, and another involves a dinner entertainment in ancient Rome known as the apophoreta, during which guests would be given pieces of wood with symbols on them for the chance to win prizes. Roman emperors, including Nero and Augustus, used lotteries to give away slaves and other properties.

Lotteries have long enjoyed broad public support. They can be defended on the grounds that they promote socially desirable activities such as education and help alleviate poverty. Lottery supporters also argue that they provide an alternative to raising taxes, which can have socially harmful effects. It has been found, however, that the objective fiscal health of a state does not have much impact on whether or when lotteries are adopted, and studies have shown that public support for lotteries remains high even in periods of economic distress.

In the United States, there are several different types of lotteries, including state-sponsored games and private lotteries. State-sponsored lotteries are legal in all 50 states, and the proceeds from these sales go primarily to educational institutions. Private lotteries are not restricted to a single geographic area and may be run by a company, nonprofit organization, or religious group. These private lotteries can raise significant amounts of revenue for a variety of projects.

The first recorded lotteries to offer tickets with cash prizes were held in the Low Countries in the 15th century. Town records in Bruges, Ghent, and Utrecht reveal that they were used to raise funds for wall repairs and to help the poor. In the American colonies, Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British, and Thomas Jefferson was an early advocate of a private lottery to ease his crushing debts.

Some critics of state-sponsored lotteries focus on the risk of compulsive gambling and its regressive effect on lower-income families. However, these concerns are not unique to lotteries; other forms of gambling expose people to similar risks, and society has generally figured out how to cope with them. Governments should not be in the business of promoting vices, but they are also not responsible for preventing people from engaging in them.

Some critics of state-sponsored lotteries believe that they should be abolished because they raise too much money for government and encourage gambling addiction. Others, however, rely on the principle that government should be in the business of providing services that are not available elsewhere. Moreover, it is hard to argue that the lottery is any more addictive than tobacco or alcohol, which have been taxed to prevent their use and discourage their consumption.