A lottery is a gambling game in which participants invest a small amount of money in order to win a prize. While most people associate lotteries with gambling, they are also used in other decision-making scenarios, including sports team drafts and the allocation of limited medical treatments. In the United States, state governments regulate and oversee lotteries, which raise money for a wide range of public purposes. In general, a large percentage of the lottery funds goes toward prizes, with smaller amounts going to retailer commissions, operating costs, and gaming contractor fees.

In a typical lottery, players purchase tickets for a chance to win a cash prize, usually in the form of an annuity (a series of annual payments). The amount of the jackpot is determined by how many tickets are sold, and promoters must subtract expenses from the total value of the prize in order to cover their overhead.

While the use of lotteries to make decisions and determine fates has a long history in human culture, state-sponsored lotteries only emerged in the 17th century. They became widely popular and were hailed as a painless form of taxation because they are based on voluntary contributions by players rather than a coercive tax on the population at large.

While the odds of winning are infinitesimal, many people still play the lottery based on the aspirational appeal of wealth and happiness. Moreover, the marketing of the lottery relies on fear of missing out—FOMO—to encourage people to purchase tickets.