A lottery is a procedure for distributing money or prizes among persons in which chances are purchased and the prizes are determined by chance. Lottery prizes are usually based on the amount of tickets sold after expenses, promoter’s profits, and taxes or other revenues have been deducted from the prize pool. Some lotteries have a fixed number of large prizes while others award smaller amounts for many different combinations of numbers or symbols. Lottery arrangements of this type have been widely used for public funding of a wide variety of activities in the United States.

Lotteries have a long history in the Bible and have been used as a means of distributing land and other property to individuals in ancient times (see Proverbs 24:10). They were a popular form of fundraising in colonial America and helped fund Harvard, Yale, King’s College, and several other American colleges. They were also a major source of revenue for the Continental Congress at the outset of the Revolutionary War.

In modern times, state-sponsored lotteries are extremely popular with the general public and generate substantial tax revenue. Critics claim that they increase illegal gambling, encourage addictive behavior, and are a major regressive tax on lower-income groups. However, even if the purchase of a lottery ticket is not a good economic decision according to expected value maximization, many people choose to buy tickets because they enjoy the excitement and fantasy of winning. These non-monetary values should be incorporated into a person’s utility function in making their choice to play a lottery.