A competition based on chance, in which numbered tickets are sold for the opportunity to win a prize, typically money. Lotteries are often used as a means of raising funds for the state or for charity.

In modern times, most states have their own lotteries and many have joined together to run multi-state games. People also play privately run lotteries and games.

When someone wins a lottery, the prize can be anything from cash to goods to free merchandise or services. Often, the prizes are a percentage of the total receipts from ticket sales. Many modern lotteries allow purchasers to select the numbers themselves, making it possible for more than one person to win.

Historically, lottery games were organized for a variety of purposes: distributing property (such as land or houses) that had been inherited; providing aid to the poor; determining fates through the casting of lots; and promoting public works such as canals, roads, churches, colleges, and other public buildings. Several colonial American lotteries helped finance public institutions, including Princeton and Columbia Universities in 1740 and 1755, respectively, as well as fortifications, roads, and libraries during the French and Indian War in the 1740s.

A lottery is a classic example of an evolving public policy that is created piecemeal and incrementally. Initially, lottery officials set up a state-run monopoly; establish a public corporation to run the lottery; start out with a small number of simple games; and, as they become established, expand into new products and game formats, such as video poker and keno.