Lottery is an arrangement in which prizes are allocated to people by means of a process that depends wholly on chance. The use of lottery-like arrangements to distribute wealth and other benefits is an ancient practice, but the modern state-sponsored variety is a relatively recent innovation.

Lotteries have largely gained acceptance because they are perceived as benefiting some specific public good, such as education. This argument is especially persuasive in times of economic stress when the public might be tempted to support tax increases or other spending cuts that would directly impact the quality of state government services. In fact, however, studies show that the objective fiscal circumstances of states have little to do with whether or when a lottery is adopted.

Moreover, the large prize amounts that lottery games typically offer generate enormous publicity and public interest. They can even encourage people to play the game on a regular basis, in hopes that the jackpot will eventually grow to an apparently newsworthy size.

Almost all of the money that is raised in Lottery games is paid out as prizes, and some is used for state initiatives, often earmarked for particular purposes. The remaining amount is used to fund a wide range of state programs, including health care, welfare, and education. Almost all state governments have some form of lottery. The evolution of these lotteries has been quite uneven, with a wide variety of policies and practices. The resulting debates and criticisms are based on a range of factors, from the dangers of compulsive gambling to concerns about the regressivity of Lottery on lower-income groups.