Lottery
A lottery is a scheme in which a number of tickets, called lots, are sold to participants for the chance to win one or more prizes. Usually, the prize pool is a percentage of the total receipts and is divided among the winners according to rules specified by the lottery organizer.
The first recorded European lotteries, which offered tickets for sale with prizes in the form of money, were held in the Low Countries in the 15th century to raise funds for town fortifications and to help the poor. A record dated 9 May 1445 at L’Ecluse mentions raising funds for a lottery in which 4,304 tickets were sold and the total prize money was 1737 florins (worth about US$170,000 in 2014).
Modern lotteries come in many formats, including those that offer a fixed amount of cash or goods to be won and those that promise that the prize will be a percentage of the receipts. The latter format presents risk to the organizer if insufficient tickets are sold.
Historically, prizes in lotteries were often large; they were prized for their monetary value and their rarity, and they were sometimes given to prominent citizens as gifts or rewards. Today, however, the majority of prizes in lotteries are less valuable and more common.
Despite their popularity, lotteries are not recommended by decision models based on expected value maximization or risk-seeking behavior. In addition, lottery purchases should not be counted as a way to accumulate wealth; it is much more practical to save or pay off debts and build up an emergency fund.