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The History of the Lottery


Across the United States, there are forty state-operated lotteries. These state lotteries use the profits they generate to fund government programs, roads and colleges. Most of the lotteries are run by the state governments, while other states have teamed up to run multi-state lotteries. These lotteries typically have large purses, with games that have high odds against winning.

The first lottery in the United States was in 1612, when King James I of England established a lottery to finance the Jamestown settlement in Virginia. The first recorded European lottery was held in the 15th century, in the Low Countries. The Chinese Book of Songs describes the game as “drawing of wood”. In Europe, lotteries became popular in the late fifteenth and sixteenth centuries. During the French and Indian Wars, several colonies used lotteries to finance public projects. In 1755, the Academy Lottery financed the University of Pennsylvania. Other colleges and universities were financed by lotteries during the 1740s. In 1758, the Commonwealth of Massachusetts organized a lottery to finance an “Expedition against Canada.”

The Louisiana Lottery Company began in 1868 and was very popular. The company was granted permission by the state legislature to operate, and was allowed to pay no taxes on lottery revenues. The company also agreed to pay $40,000 per year for 25 years to the Charity Hospital of New Orleans. This agreement provided the company with a significant source of revenue. The company brought in 90% of its revenue from outside the state.

In 1769, Col. Bernard Moore started a “Slave Lottery,” which advertised slaves and land as prizes. George Washington was the manager for this lottery. Several rare tickets bearing his signature were sold for as much as $15,000 in 2007.

The oldest operating lottery in the United States is the Staatsloterij, which was founded in 1726. The lottery became firmly entrenched in the Northeast by the 1970s. The company was very popular nationwide, and returned 48% of its profits to its operators. Several other states also established lotteries in the 1970s.

Today, lottery games are played by anyone who lives in a state where the lottery is operating. Tickets are generally sold for $1 each, and most games are played once or twice a week. The top prize amounts can be hundreds of thousands of dollars. There are also scratch-games that run for a specified period of time.

Lottery sales increased in the United States from $52.6 billion in fiscal year 2005 (FY 2005) to $56.4 billion in fiscal year 2006. The North American Association of State and Provincial Lotteries (NASPL) reports that U.S. lottery sales increased by 9%. As of August 2004, the United States operated forty state-operated lotteries.

The NASPL Web site lists nearly 186,000 lottery retailers. These retailers include convenience stores, service stations, restaurants, and nonprofit organizations. Approximately half of the retailers are convenience stores. Another third are nonprofit organizations. Most states do not limit the number of retailers that can sell lottery tickets.