Lottery is a form of gambling wherein the prize, usually money or goods, is determined by a process that relies solely on chance. It is a popular form of fundraising and has been used for many public purposes throughout history. It is a common source of income for religious institutions, schools, and municipal services, and it provides a painless alternative to taxation. In addition, it has become a powerful force in American politics, both as a tool of state budgeting and a source of revenue for local governments.

The casting of lots for material gain has a long history, with several examples in the Bible and in the records of the Low Countries, where it was used to build town fortifications and help the poor. The modern state lottery, however, is relatively recent and came into being in 1964 in New Hampshire. Since then, it has spread widely, largely because of the need for states to find ways to balance their budgets without enraging a ferocious antitax movement.

As soon as the lottery became popular, critics began to focus on specific features of its operations. These ranged from fears of compulsive gamblers to accusations of a regressive effect on lower-income communities. Many of these criticisms have been valid and have contributed to the continuing evolution of the industry.