Lottery is a form of gambling in which numbers are drawn to win prizes. Typically, the prize money is cash, but some prizes are goods or services, such as vehicles, property, and medical care. In the past, lottery profits have helped fund public projects and institutions. In colonial America, for example, it was common to find lotteries raising funds for towns, roads, libraries, churches, canals, and colleges. During the French and Indian Wars, it was even common to find lotteries raising funds for militias.

The first recorded lotteries were held in the Low Countries during the 15th century. Their purpose was to raise money for town fortifications and to help the poor. The word “lottery” comes from Middle Dutch lotinge, which is perhaps a calque on the Latin phrase loterie, meaning “action of drawing lots”.

Today, most state governments run their own lotteries and they are big business. The biggest moneymakers are scratch-off tickets, which make up between 60 and 65 percent of total lottery sales. These are regressive games, which means they mostly draw poorer people who spend a large portion of their incomes on them.

The rest of the winnings are divided up among lottery retailers, the overhead for running the lottery system itself, and state government. Many states use these profits to support infrastructure, education, and gambling addiction initiatives. Lottery also plays a psychological role by encouraging people to believe that they can become rich overnight. This belief in instant riches can create a positive feedback loop that keeps people spending more money on tickets.