A lottery is a game of chance in which tokens are sold or distributed, and prizes (often money) are awarded to those whose tokens are selected by lot in a random drawing. It may also refer to a state-sponsored game of chance in which the proceeds are used for public purposes.

The first recorded lotteries were held in the Low Countries in the 15th century to raise money for town fortifications and help the poor. They were later brought to America by colonists. Lotteries can be a means of allocating resources that have a high demand but are limited in supply, such as kindergarten admission at a prestigious school or a unit in a subsidized housing block. They can also be a way of awarding privileges that are highly desired but not universally accessible, such as the right to compete in a particular sport or to receive a vaccine for a life-threatening disease.

Lottery revenues typically expand rapidly after a lottery is introduced, but then level off or even decline. This leads to a constant need to introduce new games in order to maintain or increase revenues. The most important innovation since the 1970s has been instant games, such as scratch-off tickets, which offer lower prize amounts but higher odds of winning.

Lotteries have become a common source of revenue for states, and are promoted as helping to reduce the burden of taxes on middle- and lower-income people. However, there is little evidence that they reduce state spending or create jobs, and their economic impact varies significantly by socioeconomic group. Lottery play is disproportionately low among the poor, and it declines with age, education, and other factors.