The lottery is a popular form of gambling in which participants pay a nominal amount for the chance to win a larger sum. The prize money is awarded by random drawing and may be in the form of cash, goods, services, or other property. Some states limit the number of prizes, but others offer a large jackpot alongside a range of smaller prizes. Prize money may be the total value of tickets sold or the net value after expenses such as profits for the promoter, costs of promotion, and taxes have been deducted.

Lottery proceeds have been used for a wide variety of purposes, including aiding the poor, funding religious and secular institutions, and supporting local projects, including canals, roads, bridges, and hospitals. Many state governments have used lottery funds to enhance the general fund and address budget shortfalls. In addition, they use lottery revenue to fund support centers for problem gambling and addiction recovery and to subsidize public benefits like free transportation and rent rebates.

When states establish a lottery, they typically legislate a monopoly for themselves, and then establish a government agency or public corporation to run it. Initially, the lottery begins operations with a small number of relatively simple games, and over time tries to meet increasing demand for new games by expanding its offering. But this expansion comes with its own set of problems, notably the promotion of gambling and its regressive effects on low-income groups.