A lottery is a drawing that selects winners from among people who pay for tickets. The prizes may be money or goods. When there is a high demand for something that is limited, the lottery can make the process fair for everyone. Examples include a lottery for units in a subsidized housing block and kindergarten placements at reputable public schools. The most common, and best known, lotteries are the financial ones, in which players buy numbered tickets for a small amount of money and have a chance of winning a large sum of cash, often millions of dollars or more.

People spend over $80 billion on lotteries every year. Generally, the winnings have to be paid as taxes and are usually spent within a few years. The message that lotteries rely on is that they are fun and it’s okay to play because they help raise money for states and so on. But this obscures the regressive nature of lotteries and the fact that they are just a form of taxation.

The first recorded lotteries appeared in the Low Countries in the 15th century, with records of towns holding public lotteries to raise funds for town fortifications and to help the poor. In colonial America, lotteries played a major role in financing public and private ventures including roads, canals, colleges, churches, libraries, and bridges. In addition, they helped finance the French and Indian War and the American Revolution. The word lottery is derived from the Dutch noun lot meaning fate.