A lottery is a contest where a small number of winners are chosen at random. It is often used to select students in some schools, but it can also be a state-run contest with large prizes for participants. The money raised is often used for good in society. The term can also be applied to other events whose results seem to be determined by chance, such as finding true love or getting hit by lightning.

States enact laws to regulate lotteries and assign a lottery board or commission to oversee them. These lottery divisions select and license retailers, train employees to use lottery terminals, promote the games, sell tickets, redeem winning tickets, pay high-tier prizes to players, and verify that all retail, player, and prize claim procedures are followed. State lotteries are generally independent of one another, but some organize joint games spanning larger geographic footprints to offer bigger jackpots.

The first recorded lotteries were held in the Low Countries in the 15th century to raise funds for town fortifications and poor relief. Benjamin Franklin organized a public lottery in 1769 to raise money for cannons, and George Washington participated in a lottery to purchase slaves.

Winners of a lottery can choose to receive a lump sum or an annuity. A lump sum gives them immediate cash, while an annuity provides income over time. Choosing the right structure depends on financial goals and applicable rules surrounding your lottery win.