A lottery is an arrangement of prizes by chance, with the winnings dependent upon luck. Historically, lotteries were an important way for governments to raise money for various uses. They were also often used as a means to distribute property, slaves and land. Lotteries are popular in the United States, where the first modern state lottery was introduced in 1964. They are now operated in 37 states and the District of Columbia.

Typically, a state will establish a lottery division to administer the lottery, including selecting and licensing retailers, training employees of those retailers in how to operate lottery terminals, distributing promotional materials to retailers, and assisting retailers in selling tickets and redeeming winnings. State lottery directors must also collect and pay prizes to winners.

In the early postwar period, it was common for states to adopt a lottery in order to expand their array of public services without increasing taxes on middle- and working class families. But the popularity of lotteries began to wane in the 1960s as the federal government increased its involvement in health care and education, and as inflation caused state budgets to explode.

Despite their low cost, lotteries can generate substantial revenue for state governments. They can attract large numbers of people who would otherwise not play a game, and they appeal to the human impulse for gamblers to win. But the success of lotteries also points to a larger problem: Many people do not think that state-run lotteries are an appropriate form of gambling and do not consider the social implications of this form of taxation.