A lottery is a game in which numbers are drawn at random to determine winners. People buy tickets to enter, and the winnings depend on how many of their numbers match those selected in the drawing. Lotteries are often used by states and other organizations as a means of raising funds.
A common example of a lottery is a financial lottery, where participants pay for the chance to win a prize such as money or goods. Other types of lotteries include those that award units in a subsidized housing building or kindergarten placements at a particular public school. Although financial lotteries are criticized for being addictive forms of gambling, the money raised can be beneficial to society in general.
The drawing of lots to determine ownership or other rights is recorded in several ancient documents, including the Chinese Book of Songs from the Han dynasty (205–187 BC). In the 15th century, towns in the Low Countries organized public lotteries to raise funds for town fortifications and to help the poor. The first recorded lotteries offering tickets with prizes in the form of cash were held in the Netherlands around this time.
Today, most state lotteries offer a number of prizes ranging from small cash amounts to cars and other large items. A percentage of the ticket sales goes to expenses such as promotional costs and administrative fees, and a portion of the remainder is awarded to the winners. When the number of winning tickets exceeds the available prize amount, the excess money may be carried over to the next drawing (a practice known as a rollover), resulting in substantial sums of money being paid out.