A lottery is a method of raising money by selling tickets and then drawing for prizes. Prizes can be cash or goods, though the strict definition of lottery requires that a payment for a chance to win is made in exchange for a good or service. Lotteries have broad appeal as a means of raising funds because they are simple to organize, easy to play, and inexpensive to run. They also are relatively free of corruption and other problems associated with traditional forms of public funding, such as sales taxes or property taxes.

While the casting of lots for decisions and fates has a long history in human culture, the lottery as an activity for material gain is of much more recent origin. The earliest recorded lottery to offer prizes of any kind was organized in Rome during the reign of Augustus Caesar for municipal repairs, and the first publicly advertised lottery to distribute winnings in the form of money took place in Bruges in 1466.

Lottery proponents argue that the proceeds benefit a specific public service, such as education, and thus are a more cost-effective alternative to raising taxes or cutting government programs. This argument is particularly effective in times of economic stress, when state governments are looking for new sources of revenue and face opposition from voters to tax increases or cuts in government services. However, studies suggest that the objective fiscal condition of a state has little impact on whether or when it adopts a lottery.