Lottery is the game in which numbers are drawn at random for prizes. It is a form of gambling and, like all gambling, can have negative consequences for the poor and problem gamblers. Lottery is a state-run game and its promotion is closely tied to state policy decisions.
The origin of the word is unclear, but it likely is a calque on Middle Dutch loterie, or perhaps a variant of Old English lotinge, meaning “action of drawing lots.” The first modern public lottery to award money prizes was established in 15th-century Burgundy and Flanders with towns holding raffles in order to raise funds for town fortifications and help the poor. Francis I of France later promoted a system in several cities for private and public profit.
Today, most state lotteries are operated as government monopolies under state law and regulations. They usually hire a special agency or public corporation to run the games and promote them, select and license retailers to sell tickets and redeem winnings, pay high-tier prize winners, oversee the distribution of tickets, train and assist retailers in operating lottery terminals, and collect, validate, and report winning numbers. State officials often find themselves at odds with their own policies when promoting the lottery; they face constant pressure to expand games and increase revenues.
Lottery winners can choose to receive their prize as a lump sum or in annual installments over 20 years (with inflation and taxes dramatically eroding the value). Lump sum payments provide instant financial freedom, but require disciplined financial management to ensure long-term security.