A lottery is a form of gambling in which numbers are drawn at random for a prize. Some governments outlaw it, while others endorse it to the extent of organizing a state or national lottery. In some cases the prizes are cash or goods, while in others they are services such as education or public works projects. In either case, the lottery is considered by many to be a painless way for a government to raise money.

While casting lots to decide fates has a long history (as noted in the Bible), the modern use of lotteries as a means of raising money is relatively recent. The first recorded lotteries were held in the Low Countries in the 15th century to raise money for town walls and for poor relief.

Most states have legalized lotteries, and they rely on these funds to help finance public projects. In addition to schools, they often fund roads, canals, bridges, and churches. Some also sponsor hospitals and colleges. In colonial America, lotteries were particularly popular, and they played an important role in financing both private and public ventures. Benjamin Franklin used a lottery to raise funds for the purchase of cannons for defense of Philadelphia in the American Revolution.

While the benefits of lotteries are clear, they do have some negative side effects. For example, the addictive nature of lottery gambling can have serious consequences on individuals and their families. Moreover, while lottery proceeds are used to provide public goods and services, it is not clear whether those goods are being provided efficiently and effectively. It has also been argued that lottery advertising promotes gambling and is misleading, claiming that the winnings are tax-free (although most jackpot winners receive their prize in installments over 20 years, which are subject to inflation and taxes) and exaggerating the value of winning.