Lottery is a game in which tokens are sold or distributed, and a drawing held for prizes. When used in a wider sense, the term can refer to any activity that has an outcome that depends on fate or chance: “fighting the lottery.”

In modern times, state-sponsored lotteries are popular sources of revenue for public projects. They also play a role in raising money for charities and private organizations. These activities are often subject to various laws governing the sale of tickets and the payout of prizes. Each state enacts its own lottery laws, and many have established special divisions to administer them. These entities are responsible for selecting and licensing retailers, training retail employees on how to use lottery terminals, selling and redeeming tickets, paying high-tier prize winners, promoting lottery games, and ensuring that both retailers and players comply with state law and rules.

One in eight Americans buys a lottery ticket every week, and the player base is disproportionately lower-income, less educated, nonwhite, and male. The fact that these groups tend to spend the most on lottery tickets has led some observers to view the lottery as a form of racial and social justice, and even to suggest that we should abolish federal income taxes and replace them with state-sponsored lotteries.

In the immediate post-World War II period, state governments saw the lottery as a way to fund a wide range of services without imposing especially onerous tax burdens on the working class and middle classes. But that arrangement started to crumble in the 1960s, as states began to feel the pressure of inflation and other financial challenges.