a gambling game or method of raising money, as for some public charitable purpose, in which a large number of tickets are sold and a drawing is held for certain prizes.
In the US, lotteries usually offer cash prizes to people who buy a ticket or tickets, which may include multiple numbers or a single number. The prize amount varies depending on the number of tickets sold, the size of the jackpot and the odds of winning. Some lotteries also give away goods or services, such as automobiles, vacations, and college tuition.
The term lottery is also used to refer to any scheme for the distribution of prizes, whether or not a fixed amount of money is involved. For example, a company might run a lottery to give its employees the opportunity to choose their work assignments. Other types of lotteries are used to distribute a limited supply of something, such as units in a subsidized housing block or kindergarten placements at a public school. In such cases, the lottery is often run to avoid unfairness in distributing a scarce resource.
Several states, including the US, have legalized and regulate the lottery. Each state has a lottery board or commission that selects and trains retailers, sells tickets and redeems winning tickets, pays high-tier prizes, and ensures that all lottery activities comply with state law. In addition, most states have laws allowing nonprofit and church organizations to hold lotteries.
There is no evidence of the existence of a lottery in ancient China, although there is an early reference to chance games in the Chinese Book of Songs (2nd millennium BC). The earliest known lotteries were probably keno slips from the Han dynasty (205–187 AD), and the first lottery to award prizes in the form of money was started by Francis I of France in 1520 with the Loterie Royale.
Modern lotteries typically allow participants to choose their own numbers or to let a computer pick them for them. Those who choose their own numbers are more likely to win, but the chances of selecting the winning combination can vary greatly from one lottery to another.
Lottery winners in many countries, including the US, can choose to receive their prizes either as a one-time payment or in an annuity. When winners opt for a lump sum, they generally expect to receive less than the advertised jackpot because of the time value of money and income taxes that might be withheld from the prize amount.
Lotteries are often used to raise funds for private and public projects, including schools, churches, hospitals, roads, canals, bridges, and parks. Benjamin Franklin organized a lottery in 1740 to fund his “Mountain Road Lottery” to build roads in the colonies, and George Washington managed a number of lotteries that offered land or slaves as prizes. Many US colleges were founded by lotteries.