A lottery is a method of distributing prizes through random selection. Prizes may be money or goods. Lotteries can be a form of gambling, or they may be a way to allocate something that is in high demand but limited in supply, such as units in a subsidized housing block or kindergarten placements at a public school. A common example of a financial lottery is the Powerball, in which participants pay a small amount to have a chance of winning a large sum of money. While financial lotteries have been criticized as addictive forms of gambling, some lottery proceeds are used for good causes in the public sector.

Lotteries are widely accepted in the United States, although their scope and operations vary. Many states have their own lotteries, with the revenue supporting state programs and services. The lottery also helps finance municipal projects and services, including public schools, parks, fire departments and police forces, veterans programs and pensions for city workers. The proceeds can also be used for public works, such as street paving or new library branches.

Lotteries typically attract substantial interest and participation. A major factor in obtaining and maintaining broad popular approval is that the lottery is seen as benefiting a specific public service, such as education. However, critics argue that earmarking lottery funds does not increase their effectiveness, since the money is still subject to budget allocations in the general fund.