A competition based on chance, in which numbered tickets are sold and prizes (usually money) are given to those drawn at random. Lotteries are often used as a means of raising funds, such as for sports events or public works. Modern state-sponsored lotteries vary in form, but the principle remains the same. The first recorded lotteries were held in the Low Countries in the 15th century; town records from Ghent, Bruges, and other cities mention drawing lots for raising money to build town fortifications and help the poor. The first official state lottery in Britain took place in 1569 (advertisements for public subscriptions had been published two years earlier).
Lotteries have broad appeal as a method of collecting money, because people are willing to risk small sums for the opportunity of large gains. They can also be used in decision-making situations where a degree of randomness would be desirable, such as a sports team draft or the allocation of scarce medical treatment.
In a more informal sense, the term lottery may be applied to any arrangement in which consideration is paid for an opportunity to win a prize, such as when fans purchase sealed bags or boxes of merchandise at sporting memorabilia stores with the hope that they will receive a valuable item. California law, for example, defines a lottery as any “arrangement in which one or more prizes are allocated by a process that relies entirely on chance.” Federal statutes prohibit the mailing or transportation in interstate commerce of promotions for lotteries.