The term lottery refers to any competition that offers a prize based on chance. But the lottery isn’t just about drawing numbers and hoping to win the big jackpot—it also involves a lot of people working behind the scenes to design scratch-off games, record live drawings, update websites, and help winners with their prizes. That’s why a portion of lottery winnings goes to paying the overhead costs of the operation.

While casting lots for decisions and determining fates by lot has a long history, public lottery-style contests that offer tickets for sale with monetary prizes are relatively recent, beginning in the Low Countries around the 15th century. These were intended to raise funds for town fortifications, and later, to help the poor.

Despite their popularity, state-sponsored lotteries are controversial. Critics argue that they promote addictive gambling behavior, impose a regressive tax on lower-income individuals, and lead to a wide range of other problems. They argue that states face a fundamental conflict between their desire to increase revenues and their duty to protect the public welfare.

Historically, state lotteries have followed a similar pattern: the state legislates a monopoly; creates a government agency or public corporation to operate the lottery (as opposed to licensing a private firm in exchange for a percentage of sales); begins operations with a small number of relatively simple games; and then, in order to maintain or increase revenues, introduces new games regularly. As a result, the average prize size of a state lottery has grown from a few hundred dollars to millions of dollars.