Lottery is a type of gambling in which prizes are allocated by a process that relies wholly on chance. Prizes can be money or goods and services; examples include units in a subsidized housing block or kindergarten placements.

The history of lottery-like arrangements dates back centuries. In the Old Testament, the Lord instructed Moses to take a census of Israel and divide land by lot; the Roman emperors used lotteries to give away property and slaves during Saturnalian feasts. In modern times, governments and private promoters have used lotteries to distribute prizes for many different purposes, including public works projects like paving streets and building bridges, as well as for granting educational scholarships or other forms of financial aid.

In the United States, state lotteries play a significant role in raising funds for education, public works projects, and other government services. They are also a major source of revenue for charities, sports organizations, and other private enterprises. The first modern state lottery was established in New Hampshire in 1964; since then, almost every other state has followed suit. State lotteries are remarkably popular: in states where lotteries are legal, 60% of adults say they have played a lottery game at least once in their lives.

Despite the widespread popularity of state-sponsored lotteries, there are many critics. Some of the most persistent arguments against them are that lotteries encourage compulsive gambling, and disproportionately impact low-income communities. Others argue that state lotteries violate constitutional prohibitions against excessive taxation. Still others argue that the promotion of gambling is not a proper function of the state, especially given its negative social impacts and regressive nature.

As with all forms of gambling, lottery games are controversial and subject to intense debates. Some observers have suggested that the rise in popularity of lotteries is due to broader social trends, such as widening economic inequality and a new materialism that asserts anyone can get rich by simply trying hard enough. Other analysts point to the fact that lower-income people often gamble more heavily than higher-income individuals, and suggest that lotteries are a particularly appealing form of gambling for those individuals because they offer a high likelihood of winning a large sum of money.

Regardless of the motives of those who support state lotteries, most agree that they are effective means of raising funds for government projects. In the anti-tax era of the 1960s, it was widely believed that a lottery could be an attractive alternative to other forms of taxation; indeed, in the years immediately after 1964, many state governments became dependent on lotteries for their funding. The result has been a steady expansion of the scope and complexity of state-sponsored lotteries. This evolution has been fueled by constant pressure to increase revenues, and by the tendency of the lottery industry to develop extensive, specific constituencies—including convenience store operators (who are the primary lottery vendors); lottery suppliers (heavy contributions to state political campaigns are regularly reported); teachers (in states where lottery revenues are earmarked for education); and, in general, the general public.