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Lottery

A lottery, i.e. a drawing of lots for a prize, is a popular form of gambling. Some states, such as those under Islamic law, forbid it, while others condone it to the extent of organizing a national lottery.

Countries with a national lottery

etc.

Lotteries come in many formats. The prize can be fixed cash or goods. In this format there is risk to the organizer if insufficient tickets are sold. The prize can be a fixed percentage of the receipts. A popular form of this is the "50-50" draw where the organizers promise that the prize will be 50% of the revenue. The prize may be guaranteed to be unique where each ticket sold has a unique number. Many recent lotteries allow purchases to select the numbers on the lottery ticket resulting in the possibility of multiple winners.

Lotteries have been referred to as a "tax on stupidity" by social commentators as the odds of winning are astronomically low. Given the payoff structure, the maximum "revenue to risk ratio" occurs with the purchase of a single ticket; purchasing additional tickets does not proportional increase the expected value of the total purchase.



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