Lottery is a form of gambling in which participants pay to purchase chances at winning prizes based on the drawing of numbers or symbols. The prize money may be cash or goods or services. The term lottery may also refer to a system for allocating positions or other rights, such as housing units in subsidized housing or kindergarten placements at reputable schools. It may also be used to allocate athletic scholarships, medical care, and other benefits.
The first lottery records come from the Low Countries in the 15th century, where towns held public lotteries to raise funds for town fortifications, to help the poor, and to construct churches. The practice spread to America, where the first lotteries were established in 1612 to finance the establishment of the first English colonies. Lotteries remained popular in colonial America and helped fund college education, public works projects, and wars.
During the 1980s, 12 states (Colorado, Florida, Idaho, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Nebraska, Oregon, Tennessee, South Dakota, Virginia, and West Virginia) and the District of Columbia introduced state-sponsored lotteries, and they were joined in the early 2000s by Georgia, Louisiana, New Mexico, and North Carolina. Lotteries now account for about 20% of total state tax revenue in most states.
Lotteries have grown rapidly in popularity, but the resulting government dependence on this source of revenue has raised a number of issues. For one, lotteries are not subject to the same constraints as other forms of gambling and can expand into a wide range of activities with little oversight. Additionally, a large proportion of the prize money goes to taxes and other administrative costs, which can reduce the size of the jackpot or even eliminate it altogether.