Lottery is a game in which people pay a small sum of money for the chance to win a larger prize, such as cash or goods. Lottery games are common in most states and the District of Columbia. Some are based on the number of tickets sold; others use numbers, letters, or symbols to choose winners. The first European lotteries, involving money prizes, appeared in 15th-century Burgundy and Flanders with towns trying to raise funds for fortifications or aid the poor. Francis I of France permitted the establishment of public lottery-like operations in several cities, including the Ventura of Modena, run from 1476 by members of the d’Este family (see House of Este).

The first element common to all lotteries is some mechanism for collecting and pooling all money placed as stakes. Costs of organizing and promoting the lottery, as well as taxes or other revenues, are normally deducted from this pool before the remainder is available to award prizes. A percentage of the pool is usually reserved for profits for the promoter and a smaller percentage goes toward a fixed share of the total prize pool.

The appeal of the lottery is not just its entertainment value, but also a feeling of disempowerment that comes from a lack of control over one’s circumstances. Thus, the combined expected utility of a monetary and non-monetary benefit could outweigh the disutility of a monetary loss for an individual making a rational choice to purchase a ticket.