A lottery is a game of chance in which tickets are sold and the prize money awarded is determined by drawing lots. The word lotto is believed to be derived from the Dutch noun lot meaning fate or fortune, and the first known recorded lotteries date back to the fifteenth century, when they were used in the Low Countries to raise funds for town fortifications and charity for the poor. During colonial America, lotteries played a major role in the financing of private and public works, including roads, canals, libraries, churches, colleges, and even the Continental Congress’ attempt to use a lottery to help fund the Revolutionary War. The first modern government-run lottery was established in Puerto Rico in 1934, followed by the New Hampshire Lottery in 1964. Today, the United States has 48 state-run lotteries, as well as two national games, Powerball and Mega Millions. Although most state lotteries offer a standard set of instant games (scratch-off tickets and draw games), each offers its own unique offerings and variations, from keno to bingo to video lottery terminals.
During the nineteen-sixties, as Cohen explains, a growing awareness of the money that could be made in the gambling business came into conflict with the financial crisis facing many states. With soaring population growth and the cost of the Vietnam War, state coffers were emptying fast, and politicians “faced with an anti-tax electorate had no appetite for hiking taxes.” The result was that a lottery appeared to be a budgetary miracle, able to bring in a lot of money seemingly out of thin air.
As a result, legalization campaigns began to focus on the lottery as a way to finance a specific line item—usually education, but sometimes elder care, public parks, or aid for veterans—that would not be subject to taxation. These efforts were remarkably successful, but they also proved fundamentally misleading. For one thing, the campaigners wildly overstated the amount of money that the lottery would generate. In California, where a high-profile lottery initiative passed in 1978 after a massive advertising campaign, the resulting revenues accounted for only five per cent of the school system’s budget.
The lottery was also criticized for its effect on morality. In 1822, a Charleston slave named Denmark Vesey won a local lottery and used the winnings to buy his freedom; the same sort of religious and moral sensibility that eventually led to prohibition began to turn against the practice around this time as well. In addition, corruption and scandals often marred lottery operations; crooks would sell tickets for cash and then pocket the proceeds. Consequently, some states began to tighten regulations. Others banned the practice altogether.