A game of chance in which tickets are sold for a prize to be determined by drawing lots. In modern usage, a lottery refers to a state-sponsored game that provides a small prize to a large number of people in exchange for a nominal fee. In the United States, state lotteries are run as a form of gambling and are subject to public regulation. Some critics contend that they represent a hidden tax or a form of bribery, while others maintain that the money raised is well spent on public goods and services.
During the American Revolution, Benjamin Franklin sponsored a lottery to raise funds for cannons to defend Philadelphia against the British. Hamilton wrote that “a trifling sum for a considerable chance of gain is generally a good thing, and it is only the fear of losing much that makes people reluctant to hazard it.”
The term lottery was first used in English in 1569 as part of a print advertisement promoting a contest to win money by ‘the drawing of lots’. Its etymology is unclear, but it could be a calque from Middle Dutch loterie “action of drawing lots” or from Old English hlot (cognate with lot). The term also could refer to a grouping or division of property by lot or to a system of giving away prizes by chance selection.
It varies by state, but about 50%-60% of lottery revenue goes into the prize pool. The rest gets divvied up between administrative and vendor costs and toward projects each state designates. Some of the most popular lotteries in the United States include the Powerball and Mega Millions national games. Some states even have scratch-off games with lower jackpots and higher odds of winning. While the monetary rewards of lottery winnings may seem great, they require careful financial management and can lead to serious problems if not handled correctly.
