A competition based on chance, in which numbered tickets are sold and prizes (often goods or services) are awarded to the holders of winning numbers; often organized by governments as a means of raising money. The word lottery derives from the Latin verb loterie, meaning ‘drawing lots’ or ‘casting lots.’ Lottery is distinguished from other forms of gambling in that it depends on chance rather than skill, and it is a voluntary activity.

A common feature of state lotteries is the use of a computerized system to generate random numbers for winning tickets. This system also mixes the tickets before the drawing in order to ensure that the winning numbers are selected by chance alone. Some states have centralized systems, while others contract with private companies to manage their lottery operations.

In colonial America, lotteries played an important role in financing public works projects. Benjamin Franklin, for example, used a lottery to raise funds for the purchase of cannons to defend Philadelphia against the British. Some people, however, have religious or moral objections to state-sponsored lotteries.

As a result, lottery opponents tend to focus on the problem of compulsive gambling and the alleged regressive impact on lower-income groups. They also argue that the lottery distorts incentives and leads to poor financial decisions. Despite these objections, there is little evidence that lotteries are harmful to the economy. In fact, they may stimulate demand for other products and services, such as restaurants and bars, and provide jobs in the retail and service industries.