The lottery is an arrangement in which prizes are allocated to one or more people by a process that relies entirely on chance. The arrangements may involve a single drawing of numbers or a series of drawings. Prizes are usually cash, although merchandise and services may also be offered. The first recorded lotteries were keno slips from the Chinese Han dynasty (205–187 BC) and an inscription in the Book of Songs (2nd millennium BC). The casting of lots to determine fates has a long record in human history, including some incidents reported in the Bible; but the holding of a lottery for material gains is of more recent origin. The first public lotteries distributing money as prizes were held in the Low Countries in the 15th century to raise funds for town walls and fortifications, and to help the poor; but they were not widely popular.
In modern times, state-sanctioned lotteries are very popular, raising billions of dollars each year in the United States and Canada. Despite the large amounts of money involved, the system is vulnerable to criticism that it exploits the hopes and dreams of potential bettors and is not really an activity of chance.
The main challenge is to develop and implement a management structure that maximizes revenue while maintaining the integrity of the lottery system. Most lotteries have a central organization that controls and collects all ticket purchases; it may be a government agency or a publicly owned corporation. In many cases the agency begins operations with a small number of relatively simple games, and then, under pressure to increase revenues, progressively expands its portfolio of offerings.