The lottery is a game of chance where participants pay money to receive a prize, often cash. The prize is determined by a random drawing. The purpose of the lottery is to generate revenue for a government or other entity by offering prizes based on a draw of numbers. Lotteries can also be run to make the distribution of something that has high demand, such as units in a subsidized housing block or kindergarten placements at a reputable public school.

Since 1964, when New Hampshire became the first state to adopt a lottery, almost every state has followed suit. The reasons states give for introducing a lottery differ, but the overall structure and evolution of the lottery is similar in each case. In general, the state legislates a monopoly for itself (by law or statute); creates a public agency or corporation to manage it; begins operations with a modest number of games and progressively expands its offerings as it experiences steady demand for additional revenues.

The earliest lottery-like activities in Europe may have been private, organized by towns as means to raise funds for town fortifications and to help the poor. The first publicly held lotteries appeared in the Low Countries in the 15th century, and the lottery as we know it today was introduced to France by Francis I in the 1500s. The popularity of lottery games has remained fairly stable over time, although revenues have been cyclical. Whenever there is concern about a state’s fiscal health, the lottery gains in public approval. But studies show that lottery revenues do not appear to have a significant effect on the objective fiscal condition of state governments.