Lottery is a form of gambling that involves a prize or other reward for the chance to win a sum of money. The prizes or other rewards are allocated by a process that relies wholly on chance.

Lotteries are an important source of funding for many types of public usages and for many types of charitable use. They are also a popular form of entertainment for individuals and groups. Lottery games have a long history, with the first known lottery organized by Augustus Caesar for municipal repairs in Rome.

A basic requirement for a lottery is some method of recording the identities of bettors and the amount(s) they stake. In a traditional lottery this might be accomplished by having each bettor write his name on a ticket or other receipt which is then deposited with the lottery organizers for shuffling and selection in the drawing. Modern lotteries may use a computer system to record purchases and print tickets in retail shops or a system for collecting tickets and stakes by mail. In the latter case, there are usually strict rules to prevent smuggling and violations of postal rules.

The amount of the pool returned to bettors depends on the size of the prizes and the costs and revenues associated with organizing and promoting the lottery. It is common for a percentage of the prize pool to be deducted as profits and revenues for the promoters. A decision must also be made about whether to offer a few large prizes or many smaller ones. Larger prizes tend to increase ticket sales, but smaller prizes have lower winning odds.