A competition based on chance in which numbered tickets are sold for the opportunity to win a prize, usually a sum of money or valuable goods. Lotteries are promoted as an effective means of raising funds for state and charitable purposes. They were introduced in the Low Countries in the 15th cent. and grew very popular. They were hailed as a painless form of taxation and were generally well received by the public. Lotteries were banned in most states during the 19th cent., but were revived in the 20th.

Lottery is a classic example of a public policy that evolves piecemeal and incrementally with little or no general overview or control. Decisions are made at various levels of government – legislative and executive, as well as lottery officials themselves – with the result that the overall public welfare is only intermittently taken into account.

State lotteries are a major source of gambling revenue for governments. As such, their operation and structure have important implications for the public. In particular, the advertising necessary for generating lottery revenues necessarily promotes gambling. This can have negative consequences for poor people, problem gamblers, and the rest of the public. It also raises serious ethical questions about whether a government should be in the business of running gambling games.

The way in which lottery proceeds are distributed varies by state, but generally the larger part of the income is returned to the lottery prize pool. The remaining portion may be used for a variety of other programs, including education and health and human services, along with adding to the state’s general fund.