Lottery is the procedure for distributing something, often money or prizes, among a group by drawing lots (or numbered tickets). Although it is considered gambling, there are some notable examples of lottery-based public policy initiatives, such as the distribution of units in a subsidized housing block or kindergarten placements at a reputable school. The term is also used to refer to a particular type of financial lottery, where participants wager a small sum of money for the chance to win a large amount of money or valuable goods.
Many state lotteries begin by providing a limited number of relatively simple games, and then expand to include new games as revenues increase. This expansion is a key driver of the ongoing evolution of state lotteries. But this evolution raises important questions. For example, is it a proper function for governments to promote gambling? Do lotteries cause problems with compulsive gamblers or a regressive impact on lower-income groups?
Despite these concerns, the popularity of lotteries has consistently outpaced that of any other form of government-supported gambling. In addition, lotteries are popular when the proceeds are seen as supporting a specific public good such as education. Studies have shown that the objective fiscal circumstances of a state do not appear to be important factors in determining whether it adopts a lottery. Moreover, a lottery may attract support from an extensive specific constituency that includes convenience store operators (who provide substantial discounts on tickets); lottery suppliers; teachers, in states where a portion of the revenue is earmarked for education; and state legislators.