Lottery is a system of distributing prizes, usually money, by drawing lots. Prizes may also consist of goods or services, such as a vacation or medical treatment. The practice of making decisions or determining fates by casting lots has a long history, including several instances in the Bible. In modern times, lotteries are often used to raise funds for various public purposes and to provide recreation opportunities. Some states regulate their own lotteries, while others outsource the operation of a state lottery to private companies.

The modern lottery has a number of significant features that distinguish it from other forms of gambling. Among other things, the prizes are awarded by chance, and the purchase of tickets is voluntary. Federal statutes prohibit the use of mail or telephone to promote a lottery, and they also prohibit the shipment in interstate or foreign commerce of tickets themselves.

Because lotteries are a form of gambling, they must be carefully managed to avoid problems. These problems include the potential for abuse by problem gamblers, and the impact of the games on lower-income groups. Critics also complain that lotteries are inefficient, and that they distort consumer behavior by encouraging people to spend more than they would otherwise spend. In addition, the fact that lotteries are often promoted through advertising, and that many consumers are influenced by advertising messages, leads to ethical questions. Nonetheless, the lottery continues to be a popular and effective way to raise funds for public purposes.