A lottery is a game of chance where people pay for the chance to win a prize, usually money. The chances of winning vary based on how many tickets are sold and how much the prize is. The first recorded lotteries in Europe occurred in the 15th century in Burgundy and Flanders, where towns used them to raise money for town fortifications and poor relief. Francis I of France permitted public lotteries in several cities. The word lottery is derived from the Dutch noun lot, meaning “fate”.

A lottery can be run in a variety of ways, from simple games of chance to complicated arrangements. In general, a lottery exists when someone pays for the chance to win something, such as a cash prize or merchandise, and a winner is selected by chance. Federal laws prohibit the mailing and transportation in interstate commerce of promotional materials or tickets for lotteries, and lottery games must be conducted only at a location where the prizes can be viewed publicly.

Lotteries grew popular in the early United States, when the nation’s banking and taxation systems were in their infancy and large public works projects needed to be financed quickly. Thomas Jefferson used lotteries to retire his debts and Benjamin Franklin held one to buy cannons for Philadelphia. But by the late 1800s corruption and moral uneasiness had eroded their appeal, and state-run lotteries faded into history as bonds and standardized taxation became more popular.