The lottery is a form of gambling where people pay a small amount of money for the chance to win a larger prize. The prizes are usually money or goods. Lotteries have been criticized as addictive forms of gambling, but they are sometimes used for good purposes. For example, Benjamin Franklin held a lottery to raise funds for cannons during the American Revolution.

Despite criticism, state governments have adopted lotteries in almost every country. The process is generally similar: the state legislates a monopoly for itself; selects a private firm to run the lottery (in return for a cut of the profits); starts with a modest number of relatively simple games; and, under pressure to increase revenues, progressively expands the lottery in size and complexity.

Lotteries are popular in an anti-tax era when voters want government to spend more and politicians look for easy sources of revenue without raising taxes. But there is an ugly underbelly to this dynamic. The vast majority of people who play the lottery lose. And the winning few have to pay huge amounts of tax. The result is that most lottery winners go bankrupt within a couple of years.

Despite this, people continue to buy lottery tickets in large numbers. Some purchase tickets because they do not understand the mathematics, while others enjoy the thrill and fantasy of becoming rich. Nevertheless, the purchases cannot be accounted for by decision models based on expected utility maximization.