Official lottery is a type of gambling in which a prize is awarded by drawing lots. The prizes can be money or goods, although the vast majority of lottery winnings are cash. In most countries, a percentage of the receipts is deducted for costs such as administration, advertising and taxes. This leaves the remaining prize fund to be distributed amongst winners. The prizes are normally set by a government or independent lottery organizer. Organizers must balance the desire to attract potential ticket purchasers with the desire to avoid large losses on a small number of tickets sold.

There is a great deal of variation in how states distribute their lottery revenues. Some allocate profits to education, others to economic development or stadium authorities and still others to general state funds. The most common use, however, is to fund public lotteries. In North America, every Canadian province and 45 of the U.S. states operate lotteries, and many also offer keno, video lottery terminals and other games.

The founding fathers were big fans of the lottery, Benjamin Franklin used one to help establish Boston’s Faneuil Hall and George Washington ran a lottery to finance a mountain road through Virginia. But a combination of moral and religious sensibilities, plus corruption fears, started to turn the tide against lotteries in the 1800s. Ultimately, this led to the rise of prohibition.