A lottery is a scheme for awarding prizes to people who buy chances, such as cash or goods. It is based on chance, not skill or effort, and it may be run by state governments or private organizations. Some people play for fun; others do it to improve their finances. Some people form syndicates to increase their chances of winning.
The basic elements of a lottery include some method for recording the identities of bettors, the amounts staked by each, and the numbers or other symbols on the tickets or counterfoils. The bettor may sign the ticket to indicate his consent to have it shrunk or shuffled and then selected in the drawing; in modern lotteries, the tickets may be recorded on computers that are able to randomly select winners.
In some cases, the lottery will offer a fixed amount of money; in others, it will give a percentage of the total receipts to the winners. In the latter case, it is possible that the prize will fall to zero if insufficient tickets are sold.
There is no definitive answer to the question why states hold lotteries, but one argument is that they are a necessary evil because people are going to gamble anyway. The lottery is a way of capturing the gambling profits and channeling them into some public good. Another argument is that states need revenue, and they can raise it more effectively with a lottery than by raising taxes.