Lottery is a popular form of gambling in which numbered tickets are sold for a chance to win prizes based on random selection. A lottery may be state-run or private. The concept of using lottery draws to allocate property, slaves, and other goods is recorded in several ancient documents, including the Old Testament, and was adopted by the colonists in America as a relatively painless means of raising money for public uses. Gallup polls suggest that Americans wager on the lottery more than any other gambling activity. Its popularity has raised concerns that it preys on economically disadvantaged people who can least afford to stick to their budgets and trim unnecessary spending.
A central element of any lottery is a mechanism for collecting and pooling all stakes placed on the tickets, usually by a hierarchy of sales agents who pass the money paid for the tickets up to the organization until it is “banked”; at this point the organizers subtract costs of organizing and promoting the lottery and any percentage that goes as revenues and profits to the sponsor, leaving the remainder available for winners. Prizes for winning the lottery can be awarded either in a lump sum or as an annuity, with payments over a period of time.
Most states grant themselves monopolies on operating lotteries and use the profits to fund government programs. The centralized management and administration of state lotteries also vary, but the vast majority are supervised by an executive branch agency or the state attorney general’s office.