A lottery is a game in which numbers are drawn for prizes. The first recorded lotteries to offer tickets for sale with prize money in the form of money arose in the Low Countries in the 15th century, when various towns held public lotteries to raise funds for town fortifications and to help the poor. Other examples of such arrangements are commercial promotions in which property is given away by random procedure, military conscription, and the selection of jury members from lists of registered voters. For a lottery to be considered a gambling type of arrangement the payment of a consideration must be made for the chance to win a prize, and it must be fair and not based on skill or knowledge.
State governments sponsor lotteries to raise funds for a wide range of purposes. Some states earmark some of the proceeds for specific purposes, such as education. Others allow the money to be spent at the legislature’s discretion. Research shows that, in general, the lottery generates large profits for the state government, but it also entails some substantial costs. These include commissions for retailers, the overhead cost of running the lottery system, and salaries for employees devoted to marketing and helping winners. The profits from the games also go to a variety of other groups, such as convenience store owners (who typically sell lottery tickets); suppliers of lottery equipment (heavy contributions by these firms to state political campaigns are often reported); and teachers, in states where lottery revenues are earmarked for education.