A lottery is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse them to the extent of organizing a national or state lottery. A common feature of modern lotteries is that they involve a substantial amount of money. Despite their popularity, they are often considered harmful to society.
The earliest European lotteries appeared in 15th-century Burgundy and Flanders with towns attempting to raise funds to fortify defenses or aid the poor. In the 17th century, they became popular in France where Francis I allowed the establishment of private and public lottery games. The first public lottery to award money prizes was the ventura, which took place from 1476 in Modena under the auspices of the d’Este family (see House of Este).
A lottery is usually structured as a prize pool consisting of a fixed amount of cash or goods, or a percentage of total receipts. The prize fund may be guaranteed by the promoter, allowing the organizer to absorb a certain amount of risk, or it may be uncapped so that the prize value is proportional to the number of tickets sold. For some large-scale lotteries, the prize value is predetermined and the remaining proceeds are used for the promotion and taxes or other revenues. In a lottery where the prize value is uncapped, winning a prize requires a combination of entertainment and non-monetary utility to outweigh the disutility of a monetary loss.
