Lottery refers to any game in which participants purchase chances to win something of a specified value (usually money) by drawing lots at random. Many governments outlaw or regulate this type of gambling. Other governments endorse it to a degree, and organize state or national lotteries that have prizes ranging from small items of merchandise to large sums of cash. There are also private lotteries for the sale of products or properties, and some schools select students by lottery. Lottery games are based on chance and have low probabilities of winning, much like finding true love or getting hit by lightning.

The practice of distributing property by lot is ancient, and has been used in various ways throughout history. The Old Testament instructs Moses to divide land by lottery; the Roman emperors gave away property and slaves in Saturnalian feasts; and English colonists organized lottery-like schemes to raise funds for their projects.

During the 1740s and 1750s, public lotteries became very popular in England and America. They helped finance the building of many libraries, churches, canals, and bridges. They also provided funding for many colleges, including Harvard, Yale, Columbia, Dartmouth, and King’s College. In addition, they supported many military ventures in the colonies.

The purchase of lottery tickets cannot be accounted for by decision models based on expected value maximization, since the ticket cost is usually higher than the estimated prize. However, more general models based on utility functions that incorporate risk-seeking behavior may account for this phenomenon. Winners may choose to receive their winnings in one lump sum or in annuity payments over time.