Lottery is a gambling arrangement in which prizes are allocated by chance and the payment of consideration (money or goods) for a ticket is optional. Prizes are usually a fixed amount of money but can also be services, merchandise or other property. Some state and private lotteries are legal gambling arrangements while others are not.

In modern times, lottery has become the most common way for governments to raise money. State lotteries are typically legislatively established as a state monopoly and operate through a government agency or public corporation rather than through licensing private firms to conduct the games in exchange for a share of the profits. Lottery revenues are often earmarked for particular uses, and in many states the proceeds of the lottery fund educational programs.

Once established, lotteries enjoy broad public support. In fact, a survey conducted in 1998 found that 60% of adults report playing the lottery at least once a year. In addition, a substantial group of specific constituencies develops: convenience store owners; suppliers to the lottery (heavy contributions by these companies to state political campaigns are regularly reported); teachers, in those states where the proceeds are earmarked for education; and state legislators (who quickly come to see that their own political careers depend on the continuing popularity of the lottery).

People who play the lottery go into it clear-eyed about the odds and how much they can win. They do not take it lightly, however. Clotfelter points to one study that finds that a large percentage of lottery players are “committed gamblers,” who spend a substantial proportion of their income on tickets and expect to win more than they lose.