Lottery is a form of gambling in which people pay for the chance to win a prize. The prize can be anything from money to jewelry or a car. The lottery is operated by state governments and some private companies. Federal laws prohibit the mailing and transport in interstate or foreign commerce of promotions for lotteries and the sending of tickets themselves.

The word lottery derives from the Dutch noun lot meaning “fate,” and in English it came to mean “dividend,” “allotment,” or “decisiveness by fate.” The lottery is a method of raising funds for a variety of public purposes, and the Dutch state-owned Staatsloterij is one of the oldest running lotteries (1726).

In most modern multistate lotteries, the winning ticket must match the numbers or symbols drawn in the winning combination. The prizes are predetermined and the prize pool is usually the total of all tickets sold (or a portion of them). Expenses, including profits for the promoter and taxes or other revenues, are deducted from the ticket sales before the prizes are awarded.

Lottery proceeds can be very significant, and they are often a good source of revenue for states. However, a large share of the money is spent on operating expenses and advertising. Most states use the remaining funds to address gambling addiction or to supplement their general budgets in case of shortfalls. In the United States, the lottery has a mixed reputation: while it may be fun to play and some people do become rich as a result of doing so, it is also criticized for being addictive and for having regressive effects on low-income individuals.