A lottery is a scheme for the distribution of prizes by chance. The word derives from the French loterie, which in turn is a calque of Middle Dutch loterij. The casting of lots for decisions and determining fates by lot has a long history, including several instances in the Bible, but public lotteries are relatively recent. The first public lottery was held in Bruges, Belgium, in 1466 for the stated purpose of providing aid to the poor.
Early state lotteries resembled traditional raffles, with the public purchasing tickets for a drawing at some future date, often weeks or months away. In the 1970s, however, a number of innovations introduced changes that dramatically transformed state lotteries. One of the most significant was the introduction of scratch-off tickets that offered lower prize amounts and higher odds of winning. These were very popular, and state lotteries now make much more money from these types of games than from their traditional raffles.
Another innovation was the increase in the percentage of ticket sales that went toward the prize pool. This reduced the risk to the organizers of a loss on the unused portion of the prize funds. A related change was the increased emphasis on publicity and marketing. As a result, the size of the jackpots in state lotteries has risen to seemingly newsworthy levels, driving ticket sales and public interest.
Even so, the economics of the lottery are problematic. While the entertainment value of a monetary loss may be high enough for some individuals to offset the disutility of losing, the average person is likely to lose far more than they can afford. This makes the purchase of a lottery ticket an irrational decision for most people.