Lottery is a gambling game or method of raising money in which a large number of tickets are sold and a drawing is held for prizes. In some cases, the prizes are cash or goods. The term may also refer to any scheme for distributing items or wealth by chance.
The first recorded state-sponsored lotteries were in the Low Countries in the 15th century, when a variety of towns held public lotteries to raise money for town fortifications or to help the poor. The word lottery is likely derived from the Middle Dutch lottere, which in turn is probably a calque on Middle French loterie.
In the early years of American independence, lotteries played a major role in the financing of private and public projects. The Continental Congress voted to hold a lottery to raise funds for the Colonial army, and Alexander Hamilton wrote that “Everyone is willing to hazard trifling sums for a high chance of considerable gain.” Privately organized lotteries were common in America as well. They helped fund such colleges as Harvard, Dartmouth, Yale, King’s College (now Columbia), and William and Mary.
State governments continue to rely on lotteries as an important source of revenue. However, the amount of money collected by lottery is a drop in the bucket compared to overall state revenue. It is also regressive, as people in the bottom quintile of the income distribution spend more of their discretionary dollars on lottery tickets than do those in the top quintile. Lotteries are also a reminder that people will always want to gamble, even if they know that winning the lottery is extremely unlikely.