A lottery is a type of gambling game in which tokens (usually paper tickets) are sold and the winners are chosen in a drawing. The prizes in a modern lottery usually consist of cash or goods. Some governments outlaw lotteries while others endorse them and regulate them. In the latter case, they are often called state or national lotteries.
The term lottery is also used to describe a method of selecting people for public office or other special duties, such as jury service or military conscription. Unlike traditional games of chance, which usually involve payment of a consideration for the opportunity to win, these non-gambling types of lotteries require no payment to enter. In addition, they are often based on principles of probability rather than skill or luck.
Originally, a lottery was a procedure for distributing something (such as property or money) among a group of people by lot. The winner was the person whose token or mark fell out first when the object was shaken in a container, hence the expressions to cast lots and draw lots. Lotteries were common in the Low Countries in the 15th century and are recorded in town records from Ghent, Bruges, and Utrecht. They were used to raise funds for town fortifications and to help the poor.
In a lottery, the prize money is divided among the number of participants who have purchased tickets. The prize fund may be a fixed amount of money or goods or it may be a percentage of total ticket sales, depending on the type of lottery and the organizers’ objectives. In either case, there must be enough money in the prize pool to pay for all of the prizes and still leave sufficient funds for expenses and profit.
Although the purchase of a lottery ticket does not satisfy a decision model based on expected value maximization, it may still be a rational choice for some purchasers. The entertainment value of the ticket and other non-monetary benefits may outweigh the disutility of a monetary loss. In addition, risk-seeking behavior can play a role in lottery purchases.