A lottery is an arrangement in which a prize (usually cash) is allocated by chance to people who purchase tickets. It can also be a process by which people are awarded goods or services. Lotteries may be run by the state, by private businesses, or for charitable purposes.
The word lottery is derived from the Dutch noun loette, meaning “fate.” A Dutch state-owned Staatsloterij is the world’s oldest running lottery (1726). Historically, people used to draw lots to determine who received various items, such as food and property. Today, most governments regulate and hold lotteries. They use them to raise money for a wide variety of public usages.
Unlike most gambling, the prizes in a lottery are usually very large. This creates a strong incentive to buy tickets. A lottery is usually structured to distribute a percentage of ticket sales as revenues and profits to the state or sponsor, while the remainder is available for the prizes. Typically, costs associated with organizing and promoting the lottery must be deducted from the prize pool. In addition, a decision must be made as to whether to offer a few large prizes or many smaller ones.
Lotteries are often a source of controversy. Some critics argue that they violate principles of fairness, while others point to their economic and social benefits. The Continental Congress established a lottery to raise funds for the American Revolution, and Benjamin Franklin held lotteries to buy cannons for the city of Philadelphia. George Washington participated in a private lotteries to sell land and slaves, which were advertised in the Virginia Gazette.