Lottery is the procedure for distributing something (usually money or prizes) among a group of people by chance, typically by drawing lots. Generally, tickets are purchased in order to win the prize, which may be cash or goods. Usually the total value of the prizes is larger than the cost of the ticket, and winnings are often paid out in lump sum or in annuity payments over time. In some countries, the winners are taxed on their winnings.

Lotteries have been used to raise funds for public works projects in many countries. In the immediate post-World War II period, some states expanded their social safety nets by running lotteries. This was viewed as an effective way to reduce taxes on working-class and middle-class families while raising enough money to fund the public works. However, this arrangement began to crumble in the 1960s.

In the context of decision making, the lottery process is one that can be used to determine, for example, which student gets a slot in a university or who will get a green card. It is a method of choice that can be applied to any situation in which a resource is limited. The idea is to distribute the choices fairly.

The term is probably derived from the Italian lotto, which comes from lotte “lot, portion, share” and from Old English hlot, cognate with Dutch loterje and German Lottery. Lotteries were common in the colonies during the American Revolution, and were also used to raise funds for private and public works such as roads, canals, bridges, colleges, and churches.