Lottery is a game in which tokens are distributed to players for a chance at winning a prize. Typically, the prizes are cash or goods. Modern lotteries are usually run by a government, though privately sponsored ones are also common.
The first recorded lottery was in the Low Countries in the 15th century, when towns held public lotteries to raise money for town fortifications and to help the poor. The oldest running lotter in the world is the state-owned Staatsloterij in the Netherlands, which dates to 1726.
Despite their widespread popularity, there are serious problems with the way in which lotteries operate. They encourage gambling in an age of inequality and limited social mobility, and they lure people with the promise of a big jackpot, which can only be won by a random process. They also rely on large-scale advertising, which can be at cross-purposes with the general public interest.
The prize amount is typically the total value of the ticket after costs (including promotional expenses and taxes) are deducted. The prize amount is then distributed among the winning tickets according to a formula that depends on the number of participants and the type of ticket purchased.
Revenues initially expand dramatically when a lottery is introduced, then stabilize or even decline. To sustain revenues, lottery officials introduce new games frequently. As a result, the game is constantly evolving, with policy decisions made piecemeal and incrementally. In addition, the executive and legislative branches of a state government rarely share a coherent gambling policy.