A lottery is a game of chance where prizes are allocated by drawing lots. People pay a small sum for the chance of winning a large prize, often administered by state or federal governments. It is a popular form of gambling, but it is also used in decision-making situations like sports team drafts and the allocation of scarce medical treatment.

The term lottery is derived from the Dutch word lot meaning fate, and it refers to a system of randomly selecting winners. The drawing may be done manually or mechanically, such as shaking or tossing a bag of tickets or counterfoils. Computers are increasingly used for this purpose because of their capacity to store data about many tickets and generate random numbers or symbols. The odds of winning a lottery are typically low.

Lotteries are generally run as businesses, and their marketing strategy focuses on persuading target groups to spend money on tickets. Critics claim that this promotes gambling, with negative consequences for the poor and problem gamblers; it inflates the value of the prize (lottery jackpots are typically paid out in equal annual installments over 20 years, allowing inflation to dramatically reduce the current value); it diverts attention from more pressing public concerns; and it operates at cross-purposes with state government goals.