Lottery is a type of gambling in which prizes are allocated through a process that relies entirely on chance. Prizes are typically money or goods. Lottery is most often operated by state governments, although it may also be conducted privately. Lottery is widely practiced in the United States, where it is legal in most states. It is used to raise funds for various public purposes, including education and charitable causes.

In an era of anti-tax politics, the lottery is a powerful and popular source of revenue for state governments. But the lottery raises a fundamental issue: how a government at any level should manage an activity from which it profits. The first modern public lotteries were held in the Low Countries in the 15th century to raise money for town walls and poor relief. Later, private lotteries raised money for products, properties and slaves in Europe and America. Benjamin Franklin held a lottery in 1776 to help fund the American Revolution.

Proponents of state lotteries argue that the proceeds support important services without raising taxes. They point to the example of California’s lottery, which has given $39 billion to public schools. Others suggest that the lottery is a harmless form of entertainment, giving people a chance to fantasize about what they might do with huge sums of money even though they understand that their chances of winning are extremely slim.

Lotteries draw criticism from a variety of sources, including concern about compulsive gamblers and a perception that they prey on lower-income communities. Despite such concerns, however, state lotteries have continued to thrive since New Hampshire launched the modern era in 1964.