Lottery is a form of gambling in which prize money (often cash) is awarded to participants based on chance. The prizes in a lottery are often divided into categories or divisions. A lottery whose prize money is predetermined in advance may be considered a fixed-prize lottery or a pooled jackpot. In the latter, the total value of prizes is determined in advance after costs and taxes or other revenues are deducted from a pool of funds. The pooled jackpot type is common for large-scale lotteries in which a single large prize is offered along with several smaller prizes.

Historically, public lotteries have been popular fundraising tools for civic and charitable purposes. In colonial America they were used to finance the purchase of land from the Virginia Company and to fund town projects such as paving streets and building wharves. Later, they were widely used in the United States to raise funds for military campaigns and to build public works such as roads and bridges.

The use of lots to make decisions and determine fates has a long history, with examples in the Bible and ancient Roman law. Modern lotteries, however, are usually organized by state governments and are monopolies that do not permit competing private operators. State lotteries are often heavily promoted and are among the most popular forms of gambling in many countries.

Despite their popularity, lottery games have been the target of criticism. Critics charge that lottery advertisements are deceptive, inflating the odds of winning; promoting multiple chances to win; offering misleading information about the terms and conditions of the prizes (e.g., most lotto jackpots are paid in equal annual installments over 20 years, resulting in inflation and taxes dramatically eroding the current value); and disproportionately attracting players from higher-income neighborhoods and discouraging participation by low-income people.