“The Lottery” is a short story belonging to the genres of dystopian literature and horror. Dystopian literature—often seen as a subgenre of science fiction or speculative fiction—depicts societies in a state of moral, political, and/or social decline, usually marked by mass suffering and oppression. It is worth noting that the society in which “The Lottery” takes place does not have the sort of cataclysmic air that is common in much dystopian fiction; people, on the whole, seem to be living happy and carefree lives. Still, the fact that there is an annual “lottery” tradition in which one person in every town is randomly selected to be stoned to death (including by members of their own family) suggests that there are deep-seated moral and social issues in this society.
The juxtaposition of carefree characters and violent practices in “The Lottery” may make it a less obvious example of dystopian literature, but certainly renders it a clear example of horror. Horror as a literary genre often uses disturbing or disgusting elements to shock or scare readers. This is precisely what Jackson does with “The Lottery”—by having readers assume that the lottery is going to be a positive experience (given the casual nature of the proceedings and the fact that “lottery” is normally a positively-coded word), she is able to shock them in the final paragraphs of the story as the entire village stones Tessie Hutchinson to death.