A lottery is an arrangement whereby prizes are allocated by a process that relies entirely on chance. This is distinguished from other competitions that may involve skill. Prizes may be money, goods, services or public usages.
Lotteries have long been used to raise funds for a variety of purposes, including governmental expenses and charity. During the American Revolution, Benjamin Franklin sponsored a lottery to fund the purchase of cannons. Today, state governments conduct a number of different lottery games to raise revenue, and there is much controversy surrounding their use. Critics allege that they promote addictive gambling behavior and are a major regressive tax on lower-income populations. Others question whether lotteries really provide significant benefits in exchange for the substantial public costs and risks that they entail.
For many people, buying lottery tickets is a way to experience an enjoyable and exciting thrill or indulge in a fantasy of becoming wealthy. Their purchases are also rational if the entertainment value of winning outweighs the expected disutility of losing, as can be demonstrated by decision models based on expected utility maximization.
However, there are some exceptions. For example, if someone is highly risk-averse or has a high level of regret, then the expected utility of a lottery ticket may be negative and they would not buy one. Additionally, for people who have a low level of interest in the lottery, or for whom a potential win would be less satisfying than a lower-priority activity, the expected utility may not be worth the cost of the ticket.