Lottery is a low-odds game in which winners are selected by a random drawing. Prizes are usually cash or goods, but some prizes are service-related or charitable. In modern societies, the lottery has become a popular form of gambling, encouraging people to pay for a small chance of winning a large jackpot administered by state or federal governments. The practice of distributing property by lottery can be traced back to ancient times; the Old Testament instructs Moses to distribute land by lot, and Roman emperors gave away slaves and property in Saturnalian feasts.

The term “lottery” is from the Middle Dutch word lotinge, which may be a calque of Middle French loterie. The first state-sponsored lotteries were in the Low Countries during the 15th century, when they raised money for town fortifications and poor relief. The name of the game was probably derived from the Low Countries’ custom of “drawing lots” to decide who would be awarded a prize, and it was not until the 18th century that the practice spread to other countries.

Approximately 50%-60% of ticket revenue goes into the prize pool, while the remainder gets divvied up between administrative and vendor costs and toward whatever projects each state designates. State legislatures determine how much of the jackpot is available in lump-sum payments, and most states offer a choice between a lump sum and annual annuity payments. The former option typically offers a lower lump-sum payment, while the latter is often more tax-efficient.