A lottery is a type of gambling where people pay to have the chance to win prizes. The prize money may be cash or goods or services. In the United States, state-sponsored lotteries are very common, with most people spending $100 billion or more on tickets every year.

The earliest known lotteries were held in the Low Countries in the 15th century, where they were used to raise money for town fortifications and to help the poor. The word “lottery” is probably a Dutch variant of the Middle English noun lot, from the Dutch verb loten, to decide.

People pay to buy tickets for the lottery, but they also pay taxes, and the state has a legal responsibility to spend that tax revenue wisely. State governments often promote the lottery as a way to improve their social safety nets and fend off inflation without imposing onerous taxes on their residents. But that message obscures the regressivity of the lottery and ignores the fact that people are willing to gamble away large parts of their income on it.

A fundamental requirement for a lottery is some means of recording the identities and amounts staked by each bettor. This may be as simple as a ticket on which the bettor writes his name, or it may be as complex as an electronic system that records each bettor’s selected numbers. Then, the lottery organizer may select a pool of tickets from which to draw winners. A percentage of the total pool goes to costs and profits for the organization and to sponsors, leaving the remainder available to winners.