Lottery — the drawing of lots to determine fates or material gains — has an ancient record in many cultures. Modern state lotteries are a popular source of state revenue, earmarked for a variety of public uses. The casting of lots to decide decisions and the distribution of prizes is usually done by a centralized lottery operation, often with a monopoly over sales in the given jurisdiction. The governing law normally defines the frequency and size of prizes, sets the percentage of ticket sales that goes as profits or revenues for the lottery operator or sponsor, and limits the amount available for prize awards.

States set the rules for their lotteries and appoint a state agency or public corporation to administer them. Typically, the agency will establish and maintain the monopoly, oversee the selection of retailers, train them to use and sell lottery tickets, promote the games, collect prize claims, distribute prizes, and verify that all retailers and players adhere to the rules. The agency will also manage the high-tier prize distribution.

Although state-run lotteries draw widespread support, critics accuse them of promoting gambling and fostering poverty and inequality. The opponents point to the fact that a significant proportion of lottery proceeds is allocated as taxes and fees, which reduce the amount of money available for prizes. The supporters counter that people buy tickets because they enjoy the thrill of a chance for instant riches, even though the odds of winning are long. They argue that the money lottery players contribute to state coffers helps fund education and other public programs.