Lottery is a form of gambling in which a group of numbers is drawn and the winners get cash or prizes. In the United States, most state governments run their own lottery games, with each offering different games and prize amounts. People can play for free or with a small entry fee. The smallest prize amounts are usually pennies; the largest are millions or billions of dollars. The winners must pay taxes on their winnings. Critics say that lotteries are a disguised tax on the poor, as low-income families tend to spend a disproportionate amount of their income on tickets.

The first European public lotteries in the modern sense of the term appeared in the 15th century, with towns in Burgundy and Flanders raising money for town fortifications or helping the poor through drawing lots. Francis I of France introduced them to his kingdom in the 1500s, but they didn’t catch on.

You can choose between a lump sum and an annuity payment when you win the lottery. A lump sum grants immediate cash, while an annuity guarantees larger total payouts over time. The structure of your annuity payments will depend on your financial goals and applicable lottery rules.

When lottery jackpots reach hundreds of millions or even a few billion dollars, they stir a national fever. But how much of that eye-popping figure do the winners actually keep? Lottery formulas and taxes make that number trickier to compute than it seems.