Lottery is an arrangement by which a prize is distributed by chance to people who purchase chances (called tickets). Prizes may be cash, goods, or services. Often, the prizes are distributed in proportion to the total number of chances sold. A lottery may be organized by private groups or public entities, such as governments. Governments hold lotteries to raise funds for public projects and to promote civic causes. Some lotteries provide a single winner, while others distribute prizes among small groups of winners.
In the seventeenth century, lotteries became widely used in the American colonies to finance both private and public ventures. For example, the first college libraries in the United States were financed by lotteries, as were many roads and canals. Also, colonial governments often held lotteries to raise money for the military during the French and Indian War.
Supporters of state lotteries argue that they are a painless alternative to taxes and that they encourage the public to spend in ways that might not otherwise occur. Opponents, however, argue that the social and administrative costs of running lotteries make them dishonest and unfair. They also contend that they skirt taxation and impose a regressive burden on poorer citizens.
Several analyses of the Consumer Expenditure Survey have shown that low-income and minority households are more likely to gamble on the lottery than are wealthier and white respondents. This is not surprising, since the lottery depends on chance and is therefore a form of gambling.