The History of Lotteries

Once upon a time...

Lotteries are not a modern, or American, invention. Scholars disagree on the origin of lotteries, but forms of lotteries date back to the time of Caesar, before Christ. There are references to lotteries in the bible. From 100 B.C. through the 17th century, China and European countries used lotteries to finance defense (like the Great Wall in China); fund armies; build chapels, almshouses, canals and port facilities; and to replenish royal treasuries.

In America, Lotteries served an important function in the early development of the country through the Civil War. The first permanent English colony in America, Jamestown, was funded by a lottery started in London by James the First. Many of America's founding fathers played and sponsored lotteries. Benjamin Franklin used lotteries to finance cannons for the Revolutionary War. George Washington operated a lottery to fund construction of the Mountain Road that opened westward expansion from Virginia. John Hancock operated a lottery to rebuild historic Faneuil Hall.

In the United States, lotteries were most active during the period following the adoption of the Constitution and before the establishment of an effective means of local taxation. Prior to 1790, America had only three incorporated banks; thus, lotteries served as established sources of public and private financing. From 1790 until the lottery prohibition movement succeeded, Lotteries established and funded numerous civic improvements and educational institutions. Fifty colleges, 300 schools and 200 churches were erected with Lottery proceeds. These include some of our most prestigious educational institutions, such as Harvard, Yale, Princeton and Columbia. Between 1790 and 1860, 24 of the 33 states financed hospitals, orphanages, libraries, courthouses, and jails through lotteries.

Between 1820 and 1878, corruption in privately operated lotteries became rampant. Governments found themselves unable to regulate these lotteries and began lottery prohibition. By 1878, all states except Louisiana prohibited lotteries, either by statute or constitutional provision. In 1905, the United States Supreme Court reaffirmed the states' authority to control gambling. For the next 60 years, no state was directly involved in the operation of a gaming enterprise, and lotteries were prohibited.

In 1930, the Irish Sweepstakes was launched with great success in America because of the abolition of lotteries. In 1964, New Hampshire created a state lottery, the first legal American lottery in this century. Within several years, New Hampshire was followed by New York and New Jersey. In 1971, nationwide lottery sales surpassed $100 million for the first time.

Now, Thirty-seven states and the District of Columbia operate a lottery in the U.S., while lotteries are legal in all Canadian provinces and territories. More than 100 foreign lotteries exist and many have operated for centuries. Some countries, like Mexico, France and Japan, have national lotteries. The International Association of State Lotteries lists 63 member nations - one on every continent except Antarctica.