A lottery is an organized form of gambling in which people pay a small amount of money for the chance to win a large prize. Governments at the local, state and federal level run lotteries to raise funds for a wide variety of public projects. In addition, private corporations and charities organize lotteries for profit.

The prizes for a lottery are usually predetermined and the winners selected by drawing numbers from a pool of entries. Depending on the type of lottery, the number of prize categories and their value may vary. The size of the prize pool is determined by the amount of tickets sold, the cost of promotions, taxes and other revenue sources such as advertising fees.

People are innately attracted to the idea of winning big money. Even though the odds are stacked against them, some people are convinced that they will eventually become rich by playing the lottery. This is a dangerous thought because it can lead to compulsive gambling.

The first recorded lotteries to offer tickets for a prize in the form of money were held in the Low Countries in the 15th century to raise funds for town fortifications and the poor. The success of these early lotteries led to the introduction of other forms of gambling, including games of chance in which a person can bet on the outcome of a random event.