What is a Lottery?


Lottery is a procedure for distributing something, usually money or prizes, among a group of people by chance. A lottery may be a state-run contest promising large sums of money to winners or any contest in which the selection of winners is determined by random means. Examples of such lotteries include a contest for housing units, kindergarten placements, or draft picks in professional sports. Some states have outlawed the practice, but private promoters run lotteries in a number of countries and are an important source of gambling revenue.

The earliest lotteries, which offered tickets with prizes in the form of goods such as dinnerware, are known to have been held during the Roman Empire. Later, the first European lotteries were organized in towns to raise funds for repairing town fortifications or to help the poor. The word lotteries was probably borrowed from Middle Dutch loterie (or perhaps a calque on Middle French loterie), which itself might be an altered form of the German noun lottery.

In colonial America, lotteries were an important part of the financing of both public and private ventures. For example, a lottery was used to supply a battery of guns for Philadelphia and rebuild Faneuil Hall in Boston. Lotteries were also an important means of collecting taxes.

The deciding factor in whether to play the lottery is the odds. Ideally, the odds should be low enough to be attractive but not so low as to deter potential participants. This is why the prize money tends to be a percentage of the total pool of receipts. Adding to the difficulty of setting the odds is the fact that there are costs and fees associated with organizing and promoting the lottery, which must be deducted from the prize fund.