The lottery is a form of gambling in which players pay money to win prizes by matching numbers drawn at random. The prizes vary, but typically include cash or goods. Lotteries are usually regulated by governments and are popular forms of fundraising. They are also a significant source of criticism over their effects on compulsive gamblers and their regressive impact on lower-income groups.

The concept of casting lots to determine fates or to settle disputes has a long history in human civilization. However, the lottery as an institution for raising funds and distributing material wealth is of much more recent origin. The first public lotteries were organized by Augustus Caesar to raise money for municipal repairs in Rome, and the first European lottery to award cash prizes was probably the Ventura held in Bruges in 1466.

By the 18th century, lottery games were common in colonial America to finance projects such as paving streets and constructing wharves. George Washington sponsored a lottery in 1768 to finance road construction across the Blue Ridge Mountains.

Most state lotteries still operate as traditional raffles, in which people purchase tickets for future drawings, but innovations in the 1970s transformed the industry. These changes included the introduction of instant games (typically in the form of scratch-off tickets) that offered lower prize amounts but higher odds. These games have helped to extend the life of lottery revenues, which typically expand dramatically when a lottery is introduced and then begin to level off and sometimes decline over time.