A competition based on chance in which numbered tickets are sold, and prizes are given to holders of numbers drawn at random; often sponsored by a state or charity as a means of raising money.

Lottery participants spend billions each year in hopes of winning big. The game may seem harmless, but it poses important questions about whether governments should promote gambling as a way to raise revenue. It also raises concerns about the ability of government to manage an activity that profits from it, especially in an anti-tax era.

Generally, a lottery pool is composed of a percentage of tickets sold, plus costs for running the game and its promotion. The remaining portion of the pool is awarded as prize money to winners. The proportion of the pool awarded as prizes can vary, depending on the size and frequency of jackpots, and the cost to organize a lottery. For example, a large jackpot can draw more participants than a smaller one because it is likely to generate a windfall of free publicity on newscasts and websites.

Lottery officials are concerned with maximizing revenues, but they must balance that against the welfare of players and society as a whole. They must also determine whether the promotion of lottery games serves any legitimate public purpose. Many states, for example, use lottery proceeds to enhance the general fund, which is used to address budget shortfalls, pay for roadwork and bridgework, and boost police forces or social programs.