If you’re in the market for some extra cash, a ticket in the lottery might be just what the doctor ordered. But before you buy, learn the basics of the game. The Nerd Wallet team has all the information you need to make an informed decision.

n. (plural lot*ter*ies) A gambling game or method of raising money in which a large number of tickets are sold and a drawing is held for prizes. Also, figuratively, any event or situation whose outcome seems to be determined by chance: Life is a lottery.

A lottery is a game in which numbers are drawn at random to determine the winner of a prize. In the United States, state governments conduct lotteries and are the sole legal operators of the games. The profits from these lotteries are used for various public purposes, including education and health care.

The term comes from the Dutch word lot, meaning “fate”. In colonial America, a number of lotteries were organized to raise funds for roads, libraries, churches, colleges, canals and bridges, as well as for military expeditions.

Each state regulates its own lotteries, and each has its own laws and procedures governing how the games are conducted. The majority of lottery proceeds go toward paying the jackpots, with the rest going to administrative and vendor costs, plus whatever projects the state designates. But it’s important to keep in mind that the odds of winning a lottery are extremely long. That means that, even if you do win, you’ll likely need to wait a while before you get your hands on the prize.