A lottery is a game of chance in which participants pay a small sum to be entered into a drawing for a large prize. Most often the prizes are cash, but in some cases they are goods or services. A percentage of the proceeds from ticket sales is usually donated to good causes. In the United States, state governments operate a number of lotteries in order to raise funds for education and other public programs. Lotteries are popular in times of economic stress, when the prospect of tax increases or cuts in government spending may erode public support for other public goods.

The first recorded European lotteries were a simple form of entertainment during dinner parties, where each guest was given a ticket for a chance to win a prize. Prizes were typically fancy items such as dinnerware. Lotteries were also a common means of raising money for both private and public projects in colonial America. In fact, at the outset of the Revolutionary War, Alexander Hamilton suggested that the colonies should use a lottery system to help finance the Colonial Army.

During the 1740s, lotteries helped fund roads, libraries, colleges, churches, canals, and bridges. They also provided much-needed funding for the French and Indian Wars.

Historically, the way in which a state sets up its own lottery is fairly consistent: it legislates a monopoly for itself; establishes a governmental agency or public corporation to run the lottery (as opposed to licensing a private firm for a cut of the profits); begins operations with a modest number of relatively simple games; and then, under pressure for additional revenues, progressively expands the size and complexity of the operation. The result is that most, if not all, state lotteries have little or no coherent policy regarding the general welfare of their citizens.