A lottery is a state-sponsored contest in which participants buy tickets with a chance to win a prize. The prizes can be cash or goods. Most states have laws that regulate lotteries and require them to donate some of the proceeds to public schools. Some governments outlaw the practice, while others endorse it to the extent of organizing a national or state lottery. Lottery revenue can be used for a variety of purposes, from building parks and roads to funding medical research.

The concept of a lottery has a long history, and the casting of lots to determine fates has been recorded since ancient times. The first known lottery offering tickets for sale with prize money was organized by the Roman Emperor Augustus to raise funds for municipal repairs in Rome. Later, a number of towns in the Low Countries held public lotteries to raise money for town walls and fortifications, and for aiding the poor.

There are many different types of lottery games, from pre-numbered “passive” games to modern instantaneous games that offer a small prize instantly for each ticket sold. Some lotteries are fixed in size, and the organizer takes a share of the total ticket sales; other lotteries use pari-mutuel payoff methods that divide the available prize pool evenly between winners at each level.

Lottery play is a popular form of gambling and the prize money can be significant. However, there is a risk that the prize may be too large to attract a sufficient number of ticket buyers. In addition, the disutility of a monetary loss could outweigh the utility of non-monetary gains for some players. Despite these risks, the popularity of lotteries has continued to grow, and new games such as keno and video lottery terminals have been added to the mix.