A competition in which numbered tickets are sold and prizes are assigned by chance. A method of raising funds, often for public charities. The term also may refer to any scheme for allocating something, as student placements in a school, or units in a subsidized housing block. The etymology of lottery comes from the Dutch word for fate, or lot.

People have been participating in lotteries for centuries, and they are a major source of charitable, government and private income. Some of the early games involved drawing lots for property or slaves, and others offered cash prizes. The modern state-regulated lottery system was first established in New Hampshire in 1964. Its popularity has grown, fueled in part by big jackpot payouts. There are now more than 40 state-regulated lotteries in the U.S., including the popular Powerball and Mega Millions games.

The odds of winning a prize in a lottery are calculated by adding the probability of selecting the right numbers to the probability of the number being drawn. Many strategies exist for predicting which numbers will be chosen, such as using software, analyzing past results or relying on astrology or horoscopes. However, no system can guarantee that a person will win the lottery.

When a winner is selected, a large portion of the pool is set aside for costs and profit to the sponsor, and only a small percentage is available to be awarded as prizes. Winnings are paid either in an annuity payment or as a lump sum. The one-time option is generally a smaller amount than the advertised jackpot, because it loses value over time and is subject to income taxes.