The History of the Lottery

The use of lots for making decisions or determining fates has a long record in human history, including several instances in the Bible. But the lottery, in which people purchase tickets to win money or goods, is a more recent development. The earliest recorded public lotteries were held in the Low Countries in the 15th century to raise money for town fortifications and charity for the poor. They became popular in England and America, where Benjamin Franklin sponsored a lottery to help pay off his debts after the Revolution and Thomas Jefferson used one to buy cannons for the Virginia colony. Lotteries have played an important role in American history, raising hundreds of millions of dollars for a wide range of purposes.

In the nineteenth century, states used lotteries to finance a variety of projects and public services. In many cases, the proceeds were used to lower taxes or increase spending on other government priorities, from paving streets to establishing colleges. Lotteries were also a major source of revenue in the early United States, with Congress chartering the first state-run game in 1612. The profits went to pay for the colonies’ military defenses, paving roads, and constructing churches, hospitals, and schools. Lotteries were also popular in rural communities, where they are still practiced today. In a small New Hampshire village, for example, residents gather on the last Thursday in June to play their annual lottery, which was started to ensure that the harvest would be bountiful.

Lottery has also been the source of bitter political battles. Advocates in the late twentieth century, often with the help of Scientific Games, began arguing that a lottery could float a statewide budget and relieve politicians of the need to consider instituting a sales tax or income tax, which might have triggered an outpouring of voter disapproval. In order to sell their scheme, they began describing the lottery as a “budgetary miracle,” and claiming that it would pay for a specific line item, usually education but sometimes elder care or parks or aid for veterans.

But if lotteries really did bring in enormous sums, why weren’t they accompanied by other perks, like reduced property or sales taxes? And why did the prizes get smaller and smaller? It was counterintuitive, but Alexander Hamilton was right: the more minuscule the odds of winning, the more people wanted to play. Recognizing this, lotteries raised prize caps and added more numbers to their games, thus reducing the chances of winning even further. In the end, the only real way to beat the odds is to bet big, and that means buying a lot of tickets. Even then, the odds aren’t great: one in 3.8 million. That is, unless you’re an investor with the patience of Job. (Or maybe a mathematician named Stefan Mandel.) This article originally appeared on The Atlantic. It is republished here with permission from the publisher.