A lottery is a form of gambling in which numbers are drawn to determine the winner of a prize, such as money or goods. In modern times, lotteries are run by state governments and are a popular source of revenue for public services. However, they are often criticized for contributing to societal problems, such as poverty and compulsive gambling.

The word lottery derives from Middle Dutch loterie, a compound of Middle Dutch lot (a number) and erie (drawing). The first recorded lotteries, which offered tickets for sale in exchange for cash prizes, were held in the Low Countries during the 15th century. Town records from Ghent, Bruges, and Utrecht mention the raising of funds for town walls and for the poor.

Since the 1970s, when states began legalizing and promoting their own state-sponsored lotteries, the industry has expanded dramatically. Some 40 states now operate lotteries, with total sales surpassing $42 billion in 2002. But the number of winners remains very small. Lottery revenues are used for a variety of purposes, including education, roads, and other infrastructure projects.

Traditionally, a state’s lottery is legislated as a monopoly by the state; established as a publicly owned company or government agency; begins operations with a limited set of games and a modest prize pool; and, in response to constant pressure for more revenues, gradually expands in size and complexity. This expansion into new types of games, such as video poker and keno, has also increased the cost of operating the lottery.

Supporters of state-sponsored lotteries argue that they provide a painless alternative to higher taxes and are based on players’ voluntary spending. But critics point out that the profits are being diverted from other public needs, and that the regressive effects on lower-income groups are especially troubling.

In addition, it has been shown that many people who play state-sponsored lotteries are not representative of the general population. Lottery participants tend to be heavily concentrated in middle-income neighborhoods, while the wealthy and the poor participate at much lower levels. The lack of representation by the poor, along with the fact that most lottery games require a high purchase amount, has led to a growing divide between those who can afford to play the lottery and those who cannot. This has prompted increasing calls for the elimination of state-sponsored lotteries.