A lottery is an arrangement in which one or more prizes are allocated to persons or groups by a process that relies solely on chance. Prizes may be money, goods, services or privileges such as public school placements or units in a subsidized housing block. The term is sometimes used to refer to state-sanctioned games of chance for other goods and privileges such as sports team draft picks, academic scholarships or employment.

Throughout history, many nations have held lotteries to raise funds for a variety of public and private ventures. For example, in 17th-century England and the colonies lotteries were common methods of funding such public projects as roads, libraries, churches, canals, colleges and hospitals, and they helped fund the British Museum and many American colleges including Harvard, Dartmouth, Columbia, King’s College, Union and William and Mary.

Lotteries typically enjoy broad public support and generate substantial revenue for states. They are often defended as an attractive alternative to direct taxation because they offer voters the opportunity to voluntarily spend their money while at the same time providing public benefits. However, critics argue that lotteries promote addictive gambling behavior and have a major regressive impact on lower-income groups. Moreover, the development of lottery-based revenues tends to create special interests with lobbying power and influence over the decision making process – such as convenience store owners; lotteries suppliers (heavy contributions from suppliers to state political campaigns are routinely reported); and teachers, in those states that earmark lottery funds for education.