A lottery is a gambling game in which tickets are sold for a prize. It is sometimes used as a way to select students for a school, or units in a subsidized housing block, or other items of little material value. It works best when there is great demand for whatever is being awarded and a limited number of winners can be selected. There are several different types of lottery, but most have similar features. Generally, participants purchase a ticket or group of tickets, and winners are selected at random by a drawing. Some people argue that lotteries promote addictive gambling behavior, are a major regressive tax on poorer individuals and communities, and encourage illegal activity.

In the United States, state-sponsored lotteries are a popular form of raising money for public purposes. They typically have large jackpots and generate considerable publicity. Critics contend that state governments should not rely on lotteries as a major source of revenue, especially in times of economic stress, and that the proceeds are usually diverted from programs that could be more effectively financed by other means.

The term “lottery” probably derives from the Middle Dutch word lotere, which is a diminutive of the English word for chance (literally, “action of casting lots”). The first recorded lottery to offer tickets for sale with prizes in the form of cash was held during the reign of Augustus Caesar for municipal repairs in Rome. Lotteries are also found in the history of colonial America, including Benjamin Franklin’s attempt to raise funds for cannons to defend Philadelphia against British attack in 1776.