Lottery is a form of gambling in which people purchase tickets for a drawing to determine a winner. Prizes can be cash or goods. The amount of money awarded depends on how many tickets are sold and the percentage of ticket sales that go toward the prize fund. Some lotteries have predetermined prizes, while others offer a fixed percentage of receipts (or revenue). The latter format is more popular, since it reduces risk to the organizer.

In the United States, state governments run most lotteries. Typically, a lottery is established by state law; establishes a government agency or public corporation to oversee operations (as opposed to licensing a private firm in exchange for a portion of the proceeds); begins with a modest number of relatively simple games; and, under pressure to maintain or increase revenues, progressively expands its offerings through new game introductions.

Historically, prize amounts have varied widely, but in the 1990s the trend was towards lower, more consistent jackpots. This trend has continued into the 21st century. Lotteries also often promote “instant games” or scratch-off tickets, which have lower prize amounts and higher odds of winning. These types of games are a great way to raise money for charity, and can have a significant social impact.

As with other forms of gambling, lottery play varies by socio-economic characteristics. Men tend to play more than women, blacks and Hispanics less than whites, and the young and old play less than those in the middle age range. People in the highest income brackets also play more. When winning, lottery winners must decide whether to take the prize in a lump sum or as an annuity payments, which are paid out over several years and are taxed at different rates.