A lottery is an arrangement wherein prizes, such as cash or goods, are allocated to participants by a process that relies wholly on chance. The term may also be used for any competition where entrants pay to enter and names are drawn even though skill is required for further participation.
Lottery games can be based on numbers, letters or symbols; they may involve a single drawing of winners, or several consecutive drawings with varying prizes. Prizes range from a small sum of money to large-ticket items such as automobiles and vacations.
The first recorded lotteries in Europe were held during the 15th century for the purpose of raising funds to build town fortifications and to help poor people. They were often accompanied by entertainment and other non-monetary benefits, so that purchasing a ticket could represent an overall positive utility for the individual.
Today, a lottery is typically a government-run enterprise, with a monopoly on its operations granted by law. It is overseen by a state agency or corporation, and usually starts operations with a modest number of relatively simple games. However, a continuing demand for increased revenues has prompted a gradual expansion in the number of available games. As the industry evolves, critics become concerned about its promotion of gambling as a recreational activity, potential negative impacts on poor people and compulsive gamblers, and regressive effects on low-income households. It is also a question of whether the lottery performs an appropriate function in a democratic society.
