The lottery is a game in which players pay a small sum to have a chance to win a prize, such as cash or goods, by matching a set of numbers. The winning numbers are chosen at random by a computer. The prize money is distributed among a group of winners. Lotteries are often a form of public funding, with the prize money used for purposes such as education or infrastructure projects.

While the casting of lots to make decisions or determine fates has a long history, state-sponsored lotteries, with their promise of material gains, are of more recent origin. The first public lotteries were held in the 14th century, with the earliest modern lottery games appearing in Flanders in the first half of the 15th century. These were primarily cash prizes, although there are also a number of games that award non-cash awards such as housing units or kindergarten placements.

State lotteries typically generate initial, dramatic growth in revenues, but after a few years the revenue streams level off and even begin to decline. As a result, new games are constantly introduced to maintain or increase revenue.

Lottery winners are typically drawn from middle-income neighborhoods, with fewer proportionally coming from lower-income communities. These trends have fueled a debate about whether state lotteries should be used to address social problems such as poverty and inequality. However, the way that lottery policies are developed and implemented has often prevented these issues from being taken into consideration. This is because policymaking is done piecemeal, with little or no overview, and officials inherit the lottery’s structure and dependence on revenues.