Making decisions and determining fates by the casting of lots has a long record in human history, including several instances in the Bible. The lottery, however, as a method of raising money for public consumption is considerably more recent. The earliest known lotteries took place during the Roman Empire, mainly as an amusement at dinner parties where each participant received a ticket and was assured that they would win something. Prizes were often fancy items such as dinnerware. The first public lottery was organized by Augustus Caesar for the purpose of municipal repairs in Rome.
The basic elements of all lotteries are the pool or collection of tickets and their counterfoils, from which the winners are selected by drawing. The pool must be thoroughly mixed by some mechanical means, such as shaking or tossing, in order to ensure that chance determines the winning numbers. Computers have come to play an increasing role in this process.
Another essential element of all lotteries is a set of rules governing the frequency and size of prizes. After costs of organizing and promoting the lottery are deducted, a percentage normally goes to the promoter as revenues and profits; the remainder may be offered as a single large prize or as a series of smaller prizes.
Winners are usually presented with the option of receiving their prize in one lump sum or in annual installments. The former provides immediate access to the funds, which can be advantageous for purposes such as debt clearance or major purchases. However, lump sums require disciplined financial management to sustain their value over time.
