A lottery is a gambling game or method of raising money in which a large number of tickets are sold and a drawing is held to determine winners. In some cultures, the prize amounts are large; in others, small prizes are offered. It is a form of chance and is generally illegal in most places. In the United States, a lottery can be operated by a state or private organization. The winner receives a prize, usually cash, but may also choose to take a lump sum. Many lotteries are conducted to raise funds for public works projects, colleges, and charitable causes.

A lottery has become a popular way to fund education in the United States, with many school districts using the funds to pay for technology and other educational resources. It is also an increasingly common way for states to raise revenue for their social safety nets. Its success has created a growing industry of companies that offer lottery software and management services. This is in addition to the many individuals and organizations that run state and national lotteries.

The word lottery is thought to be derived from the Latin verb lotere, meaning to divide or distribute by lots. The practice of dividing property or rights by lot is recorded in the Bible and in ancient documents, and it became widely used in Europe in the fifteenth and sixteenth centuries. The first American lotteries were conducted to finance the Jamestown settlement in Virginia in 1612. By the nineteenth century, states were using them to fund towns, wars, and other public works projects.

In general, the term lottery applies to any competition in which names are chosen by chance, even if there are later stages that require some degree of skill. It can also be applied to something whose outcome seems to depend on chance: One could say that life is a lottery, although it would probably be more accurate to say that a marriage or a career is.

Most states have a lottery, and the proceeds are used to fund education, roads, hospitals, and other public works. The profits are distributed differently in each state, but they are a major source of revenue for the states. Historically, the states have sought to keep taxes low, so the lottery has often been a popular way to generate revenue without increasing the burden on the middle class and working classes.

The North American Association of State and Provincial Lotteries tracks the distribution of lottery proceeds in each state. The table below shows how the states have allocated their lottery profits since 2006. Some of the largest lotteries allocate more than a third of their revenues to education.