A lottery is an arrangement where prizes are allocated by a process which relies wholly on chance. Prizes can be cash or goods. It is a type of gambling which is often outlawed by governments, but many endorse it and organize state or national lotteries.

A central element of all lotteries is the drawing, the procedure for selecting winners. Generally tickets or counterfoils are thoroughly mixed by some mechanical means such as shaking or tossing, and then drawn randomly from the mix by computerized equipment. In this way a winner is selected from among all the tickets in the pool. The selection of winners may also be based on other criteria such as the number of players or groups who purchase tickets, or it may be a percentage of total sales.

Traditionally, lottery prizes have been in the form of cash or goods. Early lotteries were used to raise money for a variety of purposes in the colonial era, including paving streets, constructing wharves and building colleges such as Harvard and Yale. George Washington even sponsored a lottery in 1768 to help relieve his crushing debts.

In the United States, state governments regulate and run the majority of lotteries. They usually legislate a monopoly for themselves, hire a state agency or public corporation to run the lotteries (as opposed to licensing private firms in return for a share of the profits) and then begin with a small number of relatively simple games. Under pressure to increase revenues, lottery operations grow progressively more complex over time.