The History of the Lottery

Believe it or not, the basic premise of the lottery drawing has been in use for thousands of years.

In the past fifty years or so, modern lotteries have appeared in the unlikeliest of places, from conservative Texas to once hardline-communist Russia. We take the game for granted these days.

Though the word calls to mind images of scratch-off tickets, ping pong balls stenciled with numbers, and over-sized novelty checks; the game has a rich heritage that’s intertwined with modern cultural history.

A Note on the Name

I’m a bit of a nerd, so I like to research etymology (the origin of words) when I’m writing about a topic.

Normally, it’s easy to work out where the name of a game of chance came from. Craps is pretty clearly derived from the French word “crabes,” which was a similar dice game played among peasants. Blackjack’s name comes from an old rule that rewarded hands containing a black jack (the jack of clubs or spades).

I’d like to point out that we don’t have a clear idea of where the modern word “lottery” comes from.

Old English had a word – “hlot” – which meant “one unit,” and was pronounced like the modern English word “lot.” It’s assumed that Italian somehow absorbed that Old English word, and they gave us the word “loteria.” That word refers explicitly to a game that distributes prizes based on chance.

But things get weird when you consider the roots of the French word “loterie,” which etymologists swear came from the Dutch word “loterje.” That word meant “fate,” which is a particularly dark way of looking at a game of chance if you ask me.

Why did I go out of my way to talk so much about the game’s name? For the simple reason that people all over the world participate in lottery games, and I think it’s interesting that the games don’t really have a single origin story.

Did Moses Play the Lottery?

Reading up in preparation for this article, I found more than a few references to the fact that “Moses played the lottery.” Since none of these sources ever quoted the Bible verse that proved their assertion, I went looking for it myself.

I found the reference in the Bible, and I’ve got to say, I don’t think their assertion is true at all.

Here’s what the book of Numbers has to say about it:

“The Lord said to Moses, “The land is to be allotted to them as an inheritance based on the number of names. To a larger group give a larger inheritance, and to a smaller group a smaller one; each is to receive its inheritance according to the number of those listed. Be sure that the land is distributed by lot. What each group inherits will be according to the names for its ancestral tribe. Each inheritance is to be distributed by lot among the larger and smaller groups.”

In these verses, the Bible is talking about the land west of the Jordan, which God commanded Moses to distribute among the tribes based on census numbers Moses had just taken.

I’m not sure how this got corrupted into “Moses played the lottery,” but that’s what happened.

The Bible doesn’t really talk about the game at all, though that would have been neat. Let’s look for historical references in other places.

The Lottery in Recorded History

The earliest historical reference to lotteries comes from 200 BCE. China’s Hun Dynasty used rudimentary lotteries to raise funds outside of their normal tax pool. Within four hundred years, a game we’d recognize as keno appeared in the court of Chinese Emperor Cheung Leung.

What did the Chinese need all this extra revenue for? You may have heard of the Great Wall of China – it was built mostly from revenue derived from the lotteries.

A theme is going to develop over the course of the history of lotteries – the game was and is still often used by governments to raise money for some greater purpose. I’m just warning you now so I don’t sound like a broken record later on.

Let’s start with the best record we have of lotteries in history – games played in Europe. For whatever reason, Europeans kept better records of their gambling history than people of almost any other part of the world. The result is that we have a ton of details about the game’s European history, but little from any other part of the world, though we know the lottery has been a part of just about every world culture.

The first recorded lotteries in European history were raffles put together by the widow of famous Flemish painter Jan Van Eyck. In the year 1446, Van Eyck’s widow raised money by giving away his paintings as prizes. The cost of the tickets earned her far more than if she’d sold the paintings individually.

Not all Euro lotteries were so self-serving – in the year 1465, we have a reference to Belgian lotteries, which the government used to raise funds in order to build houses for the poor, improve chapels and other public art projects, and develop canal systems for agriculture and trade.

Lotteries weren’t always organized in the public interest. Take, for instance, the lotteries in Florence, Italy in 1530. The city government offered cash prizes in a raffle-style lotto system, designed exclusively to rid the city of crushing debt, something all too familiar to modern audiences.

We find the first reference to English lotteries in the year 1567. Little is known about these government-sanctioned lotteries except that it occurred. We have more details on the lotteries of 1612, which King James I used to fund the creation of the first British colony in modern-day America at Jamestown.

A special note regarding Euro lotteries – the longest-running such game began in The Netherlands. That country’s national lottery began in 1726 and is still the most popular lotto game in that country today.

Historic American Lotteries

Though America has a fairly puritan approach to gambling in the modern era, the countries very existence was made possible by the use of lotteries. In 1776, colonists organized lotteries to raise money for their Colonial Army, without which the American Revolution would never have happened.

Lest you think lotteries were only used by America to break free of the chains of British oppression or something, the country’s most active period for lotteries came just after the adoption of the Constitution but prior to the creation of an effective means of taxation. So around the year 1789, when the government was big enough to exist but too small to effectively govern.

There’s a good reason for this. Before 1790, the entire country was served by three incorporated banks. That meant if you wanted to fund something, on a public or private level, you simply had to raise funds through raffles and lotteries.

After 1790, and right on up to the start of the Civil War seventy years later, the country’s great religious and educational institutions were constructed all on funds raised by raffles and lotteries. Fifty universities (most notably four of our eight Ivy League schools) were built this way, as were three hundred grammar schools, two hundred churches, and countless civil buildings and edifices.

While the federal government was approving the use of lotteries to fund these construction projects, state governments were doing the same thing. For the first time in human history, people had access to multiple state-sanctioned lottery games at the same time. Twenty-four of America’s thirty-three states funded major improvements (building courthouses, hospital, libraries, etc.) through state-run lotteries.

What happened to these old-school American lotteries? By the end of the Civil War, the game’s organizers were seen as corrupt, often paying smaller prizes than promised or no prizes at all. Corruption was a buzz-word then, and it didn’t take long for the government to get interested. Because the federal government couldn’t control these private contests, they were determined to prohibit them altogether.

By the early 1820s, the entire state of New York passed laws banning lotteries. By 1856, Canadians had passed The Act Concerning Lotteries forbidding all raffles and other lotteries in the Commonwealth. Ironically, in both New York and Canada, it was religious clergy who were most affected by the bans and fought hardest against them.

Despite protest from religious and charity groups, which depended on lotteries for their survival, by 1878 every state in the USA besides Louisiana had outright banned lotteries - some of them constitutionally. In the 1980s, Congress banned lotteries from the mail and from all interstate commerce activity.

Louisiana would soon be forced to follow suit, when in 1905 the US Supreme Court ruled that the federal government could prohibit states from offering gambling, and could take police action to enforce those laws.

Lotteries were dead in the US for the next sixty years.

The Modern Resurgence of Lotteries

These days, lotteries exist in 44 states, DC, Puerto Rico (which has the longest-running such game in the United States), and the Virgin Islands.

In 2012, the most recent year for which we have numbers, Americans spent $78 billion on the lottery. Let the vastness of that number sink in for a minute. Americans drink $100 billion worth of beer every year, and lotteries sell almost as well.

How did this happen? How does a game go from being outlawed at the federal and state level to being readily-accepted as a form of entertainment and fund-raising?

The New Hampshire Legislature was the first to challenge national bans on lotteries. In 1964, they created America’s first legal state lottery in nearly a century. To get around federal anti-lottery laws, the state called their game a Sweepstakes and provided it only at horse racing tracks. Then-governor John W. King was the first to buy a ticket.

With New Hampshire paving the way, several states followed suit over the next few years. Interestingly enough, New York (the state that first moved to ban the game) was one of the first adopters, launching their own state lottery in 1967.

The success of these state “lotteries” (they were still operating as sweepstakes to avoid prosecution) had a big impact on the cultural landscape. Amendments to the criminal code in both Canada and the US in the 1960s and early 1970s led to an explosion in the availability and popularity of modern games.

The Scratch Card Phenomenon

In 1973, American computer scientist John Koza joined forces with a known retail promoter (Daniel Bower) to form the Scientific Games Corporation. Koza had an idea for an inexpensive and instant-reward game that would be more satisfying than the long-term tickets.

What was their product? Scratch cards. Who was their first client? The massive Massachusetts Gaming Commission.

Koza’s algorithm was designed to ensure that all scratch card results are random. Bower’s marketing tactics were put to use creating an attractive and profitable product. It was the perfect storm of mathematical and cultural knowhow, and let’s just say their product became quite popular.

These days, scratch cards are the fastest-growing segment of the industry. Scratch cards represent more than half of all profits from lotteries. It’s a phenomenon with a relatively short history.

Just two years after the release of Koza and Bower’s scratch cards, national lotto sales topped $1 billion for the first time. Why do scratch cards sell so much? They’re simple, they offer instant gratification, and they offer fairly large prizes for a small investment.

Now that we have rampant state lotto participation, record profits, and an obscene number of different raffle, scratch-off, and other lotto games, it may seem like the game has been with us forever. Though lotteries in some form have existed for centuries, it’s only in the past few decades that they’ve become the massively profitable games they are today. It’s impossible to separate our modern history from its connections to the lottery – and now that the game is available online, it’s not going anywhere any time soon.