The lottery is a process of allocating prizes by a method that relies wholly on chance. Prizes may be money, goods, or services. The term lottery can also be applied to other arrangements that involve chance, such as filling a vacancy in a sports team among equally qualified applicants or competitions for public spaces, such as housing or education opportunities. The term is contrasted with skill-based contests, such as a sporting event or business venture, where winning depends on effort or careful organization.

The basic elements of a lottery are a pool or collection of tickets or other symbols, and some procedure for selecting winners from the pool. The winning symbol or symbols are selected by some random process such as shuffling or a drawing. Alternatively, the symbols are chosen by computer. Computers are widely used in modern lotteries because they allow for fast and accurate recording of ticket purchases, as well as for the selection of winning numbers.

While the odds of winning a lottery are extremely low, people continue to buy tickets, even when they have little hope of winning. This is because the prize amounts can be very high. Many states use the proceeds from lotteries to fund a variety of state government programs, such as public school construction and aid for the poor.

However, the growth of lottery revenues typically begins to plateau and even decline after a period of time. To maintain or increase revenues, new games must be introduced to the lottery. This has led to the proliferation of scratch-off games, keno and video poker, while traditional lotteries continue to be offered in addition to these innovations.