A lottery is a game in which numbered tickets are drawn at random for a prize. The word is derived from the Latin sortilegium, meaning “casting of lots.” Lotteries have a long history in human affairs, both as a way to make decisions and to determine fates, but they are much more common today as a means of raising money for government projects or charities.

The first recorded public lotteries in the West were held in the Low Countries during the 15th century to raise funds for town fortifications and to help the poor. In the United States, Benjamin Franklin sponsored a lottery during the American Revolution to raise money for cannons that would defend Philadelphia from the British.

Lottery arrangements are complex. The winners’ after-tax winnings are paid out in either a lump sum or in installments (called an annuity) over time, usually with the option to invest the payments and earn compound interest. Many states also keep a share of the proceeds for administration costs, including paying commissions to retailers that sell tickets and funding state programs.

The decision to play the lottery may be motivated by a variety of factors, including the desire to acquire wealth and prestige, the desire for excitement, the tendency to attribute negative outcomes to outside forces such as bad luck, and the psychological motivation to avoid regret. In addition, people tend to overweight small probabilities. For example, if something has a 1% chance of happening, people will treat it as if it had a 5% probability—a phenomenon called the decision weight effect.