A type of lottery is a process of allocating something, usually money or prizes, between people by random selection. It may be used for decision-making in situations where demand exceeds supply, such as sports team drafts and allocation of scarce medical treatment. Financial lotteries are popular forms of gambling that reward participants with large sums of cash, but can also be used to raise funds for public goods.

Making decisions and determining fates through the casting of lots has a long history, including a number of instances in the Bible. However, the use of a lottery for material gain is relatively recent. The first recorded lottery was a public auction held by the Roman Emperor Augustus for municipal repairs in Rome. Other early public lotteries distributed fancy articles, such as dinnerware.

In the United States, state governments regulate lotteries and collect the taxes, which are a significant source of revenue for local government agencies. These lotteries typically delegate the responsibility of selecting and licensing retailers, promoting lottery games, paying high-tier prizes, and administering the distribution of winning tickets to players. Lotteries may also conduct multi-state games, such as Powerball and Mega Millions, which offer a large top prize.

While state lotteries have won broad public support as a way to raise money for favored projects, they also promote gambling and are often criticized for their addiction-inducing nature. In addition, their promotional campaigns focus on persuading people to spend money to have a chance of winning. These strategies may have unintended consequences for the poor and problem gamblers, especially since a significant portion of lottery proceeds go to these groups.