Lottery is a form of gambling that involves paying for a chance to win money or other goods. A lottery is run by a state or other entity and the proceeds are used for a variety of purposes, including public works projects and social welfare programs. The lottery has a long history, with references in the Bible and ancient Chinese texts. Its use for material gains is more recent, however, with the first recorded lottery in the Western world being held during the reign of Augustus Caesar to finance municipal repairs in Rome. Initially, the lottery was simply an informal amusement at dinner parties, with ticket holders receiving prizes in the form of fancy articles such as dinnerware.

Once established, state lotteries tend to follow remarkably similar patterns. They legislate a monopoly for themselves, establish a public agency or corporation to run the lottery (as opposed to licensing private firms in return for a cut of profits), and start out small with a limited number of relatively simple games. Over time, as pressure for additional revenues mounts, the lottery progressively expands in size and complexity.

Most of the money outside winnings goes back to the states, which can spend it as they see fit, though it is often earmarked for particular uses. For example, some states devote a large share of the money to fund support centers and groups for compulsive gambling. Others invest it in broader state infrastructure, such as paving streets and building bridges, and still others put the money into general funds to help address budget shortfalls.