A lottery is an arrangement for allocating prizes based on chance. It can be a game where numbers or other symbols are drawn from a hat, bowl, or other container to determine a winner; or it may involve betting on the outcome of an event, such as a sports competition. A common form of lottery is one whose proceeds are used to fund public projects, such as a road or a new building.

Making decisions and determining fates by the drawing of lots has a long history in human societies, with examples occurring throughout the Bible. However, lotteries for material gain are relatively recent in history. They have been widely used as an apparently painless form of taxation, and they can generate enormous jackpots that draw publicity and attract public attention.

Many states have legalized lotteries and a few have even established state-owned companies to run them. Once a lottery is established, its development typically follows similar patterns: the state legislates a monopoly for itself; establishes an agency or public corporation to run it (rather than licensing a private firm in exchange for a share of profits); begins operations with a modest number of relatively simple games; and, due to constant pressure for additional revenues, progressively expands in size and complexity.

While the initial reaction to lotteries is generally positive, their long-term popularity and financial viability depend on how well they are perceived as serving a legitimate public purpose. Studies have found that lottery popularity is largely connected to the degree to which people believe that proceeds from the game will benefit a particular public good, such as education. Lotteries also tend to win broad approval when the state government faces economic stress or the threat of higher taxes, but they are less likely to succeed in winning that kind of support when the state’s fiscal health is strong.

As a result, state policy on gambling and lottery is often driven by the need to meet revenue targets rather than an overarching vision of the public welfare. Consequently, few, if any, states have a coherent “gambling policy” or even a lottery policy.