In a lottery, players buy a chance to choose a set of numbers from a larger set. A drawing is held after each ticket sale to determine the winners. Most states run lotteries, generating tens of billions in revenue each year that goes to state governments (though they make up only a tiny fraction of overall state spending). In the U.S., the average person spends $767 per year on lottery tickets, according to Business Insider.

Lotteries have been around for centuries, with the drawing of lots to settle disputes recorded in ancient documents. In colonial America, they played a significant role in financing private and public projects, including towns, wars, roads, canals, colleges, and churches.

Many people play the lottery because they think it will improve their life. A winning ticket can bring substantial benefits, but it’s important to understand the odds of winning.

The expected utility of a monetary loss is outweighed by the entertainment value, or non-monetary benefits, of playing a lottery, so buying a ticket represents a rational decision for most players. That said, the lottery is a form of gambling, and some players are more likely to gamble than others.

Super-sized jackpots drive lottery sales and earn the game a windfall of free publicity on news sites and TV. But they also increase the odds of winning, which in turn reduces the prize pool’s future size. And when the jackpot does roll over, it’s often a smaller amount than advertised—even before considering taxes. In most countries, winners can choose between annuity payments and a one-time lump sum, but the lump sum is typically less than the advertised jackpot because of the time value of money.