Today at the gym I watched the HGTV show “My Lottery Dream Home” with David Bromstad. He consults lottery winners about their preferences on a new home and then shows them three which they select from. Some have won as much as $15 million. The male winner today had been couch surfing — staying at friends’ houses — for a few months until he could get back on his feet financially and ended up choosing a lovely home in the country with a large out building where he could restore automobiles. I am not a frequent player of the lottery. The chances of winning are very low, and I don’t like those chances. I even went with a friend to Las Vegas once and spent only five dollars gambling. If you have ever been to a casino, you know that based on their income, most of the people there spend much more than they should on gambling. It is not an activity that many very rich people participate in which should tell you something. However, I love the stories about when truly deserving people win the lottery. Let’s learn more about lotteries.
According to Wikipedia, a lottery is a form of gambling that involves the drawing of numbers at random for a prize. Some governments outlaw lotteries, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments. The most common regulation is prohibition of sale to minors, and vendors must be licensed to sell lottery tickets. Although lotteries were common in the United States and some other countries during the 19th century, by the beginning of the 20th century, most forms of gambling — including lotteries and sweepstakes — were illegal in the U.S. and most of Europe as well as many other countries. This remained so until well after World War II. In the 1960s, casinos and lotteries began to reappear throughout the world as a means for governments to raise revenue without raising taxes.
Lotteries come in many formats. For example, the prize can be a fixed amount of cash or goods. In this format, there is risk to the organizer if insufficient tickets are sold. More commonly, the prize fund will be a fixed percentage of the receipts. A popular form of this is the "50–50" draw, where the organizers promise that the prize will be 50% of the revenue. Many recent lotteries allow purchasers to select the numbers on the lottery ticket, resulting in the possibility of multiple winners.
Classical history
The first recorded signs of a lottery are keno slips from the Chinese Han Dynasty between 205 and 187 BC. These lotteries are believed to have helped to finance major government projects like the Great Wall of China. From the Chinese “Book of Songs” in the 2nd millennium BC comes a reference to a game of chance as "the drawing of wood," which in context appears to describe the drawing of lots.
The first known European lotteries were held during the Roman Empire, mainly as an amusement at dinner parties. Each guest would receive a ticket, and prizes would often consist of fancy items such as dinnerware. Every ticket holder would be assured of winning something. This type of lottery, however, was no more than the distribution of gifts by wealthy noblemen during the Saturnalian revelries. The earliest records of a lottery offering tickets for sale is the lottery organized by Roman Emperor Augustus. The funds were for repairs in the city of Rome, and the winners were given prizes in the form of articles of unequal value.
Medieval history
The first recorded lotteries to offer tickets for sale with prizes in the form of money were held in the Low Countries in the 15th century. Various towns held public lotteries to raise money for town fortifications and to help the poor. The town records of Ghent, Utrecht and Bruges indicate that lotteries may be even older. A record dated May 9, 1445 at L'Ecluse refers to raising funds to build walls and town fortifications, with a lottery of 4,304 tickets and total prize money of 1737 florins — worth about $170,000 in 2014. In the 17th century it was quite usual in the Netherlands to organize lotteries to collect money for the poor or in order to raise funds for a wide range of public usages. The lotteries proved very popular and were hailed as a painless form of taxation. The Dutch state-owned Staatsloterij is the oldest running lottery — 1726. The English word lottery is derived from the Dutch noun "lot" meaning "fate."
The first recorded Italian lottery was held on January 9, 1449 in Milan organized by the Golden Ambrosian Republic — a short-lived government founded in Milan by members of the University of Pavia with popular support, during the first phase of the Milanese War of Succession — to finance the war against the Republic of Venice. However, it was in Genoa that Lotto became very popular. People used to bet on the name of Great Council members — who were drawn by chance — 5 out of 90 candidates every six months. This kind of gambling was called Lotto or Semenaiu. When people wanted to bet more frequently than twice a year, they began to substitute the candidates’ names with numbers, and modern lotto was born — to which both modern legal lotteries and the illegal numbers game can trace their ancestries.
Early modern history
France 1539-1789
King Francis I of France discovered the lotteries during his campaigns in Italy and decided to organize such a lottery in his kingdom to help the state finances. The first French lottery — the Loterie Royale — was held in 1539 and was authorized with the edict of Châteaurenard, a commune in the Arles arrondissement, in the Bouches-du-Rhône department, in the Provence-Alpes-Côte d'Azur region, in southern France. This attempt was a fiasco, since the tickets were very costly and the social classes which could afford them opposed the project. During the two following centuries, lotteries in France were forbidden or, in some cases, tolerated.
England 1566-1826
Although the English probably first experimented with raffles and similar games of chance, the first recorded official lottery was chartered by Queen Elizabeth I in the year 1566 and was drawn in 1569. The 400,000 tickets issued cost £0.50 each — roughly three weeks of wages for ordinary citizens, with the grand prize worth roughly £5,000. This lottery was designed to raise money for the "reparation of the havens and strength of the Realme, and towardes such other publique good works," including the rebuilding of ports and new ships for the royal fleet. Each ticket holder won a prize, and the total value of the prizes equaled the money raised. Prizes were in the form of both "ready money" and valuable commodities such as silverplate, tapestries and fine linen cloth. Additionally, each participant was granted immunity from one arrest, "so long as the crime wasn't piracy, murder, felonies or treason." The lottery was promoted by scrolls posted throughout the country showing sketches of the prizes.
Thus, the lottery money received was an interest free loan to the government during the three years that the tickets — 'without any Blankes' — were sold. In later years, the government sold the lottery ticket rights to brokers, who in turn hired agents and runners to sell them. These brokers eventually became the modern-day stockbrokers for various commercial ventures. Most people could not afford the entire cost of a lottery ticket, so the brokers would sell shares in a ticket; this resulted in tickets being issued with a notation such as "Sixteenth" or "Third Class."
Many private lotteries were held, including raising money for The Virginia Company of London to support its settlement in America at Jamestown. The English State Lottery ran from 1694 until 1826. Thus, the English lotteries ran for over 250 years, until the government — under constant pressure from the opposition in Parliament — declared a final lottery in 1826. This lottery was held up to ridicule by contemporary commentators as "the last struggle of the speculators on public credulity for popularity to their last dying lottery."
Early United States 1612-1900
An English lottery, authorized by King James I in 1612, granted the Virginia Company of London the right to raise money to help establish settlers in the first permanent English colony at Jamestown, Virginia.
Lotteries in colonial America played a significant part in the financing of both private and public ventures. It has been recorded that more than 200 lotteries were sanctioned between 1744 and 1776, and played a major role in financing roads, libraries, churches, colleges, canals, bridges, etc. In the 1740s, the foundation of Princeton and Columbia Universities was financed by lotteries, as was the University of Pennsylvania by the Academy Lottery in 1755.
During the French and Indian Wars, several colonies used lotteries to help finance fortifications and their local militia. In May 1758, the Commonwealth of Massachusetts raised money with a lottery for the "Expedition against Canada."
Benjamin Franklin organized a lottery to raise money to purchase cannons for the defense of Philadelphia. Several of these lotteries offered prizes in the form of "Pieces of Eight." George Washington's Mountain Road Lottery in 1768 was unsuccessful, but these rare lottery tickets bearing Washington's signature became collectors' items; one example sold for about $15,000 in 2007. Washington was also a manager for Col. Bernard Moore's "Slave Lottery" in 1769, which advertised land and slaves as prizes in The Virginia Gazette.
At the outset of the Revolutionary War, the Continental Congress used lotteries to raise money to support the Colonial Army. Alexander Hamilton wrote that lotteries should be kept simple, and that "Everybody ... will be willing to hazard a trifling sum for the chance of considerable gain ... and would prefer a small chance of winning a great deal to a great chance of winning little." Taxes had never been accepted as a way to raise public funding for projects, and this led to the popular belief that lotteries were a form of hidden tax.
At the end of the Revolutionary War the various states had to resort to lotteries to raise funds for numerous public projects.
German-speaking countries
The first big lottery on German soil was held in 1614 in Hamburg.
In Austria the first lottery was drawn in 1751 during the reign of Empress Maria Theresia and was named Lotto di Genova since it was based on 90 numbers.
Spain 1763
Spain offers a wealth of lottery games, the majority of which are operated by Loterías y Apuestas del Estado with the remaining lotteries operated by the ONCE and the Catalan government. The first Spanish lottery game was played back in 1763 and over the last two centuries, playing the lottery in Spain has developed into a tradition.
The Spanish Christmas Lottery — officially Sorteo Extraordinario de Navidad or simply Lotería de Navidad is a national lottery. It is organized every year since 1812 by a branch of the Spanish Public Administration, now called Loterías y Apuestas del Estado. The name Sorteo de Navidad was used for the first time in 1892.
The Spanish Christmas lottery is the second longest continuously running lottery in the world. This includes the years during the Spanish Civil War when the lottery draw was held in Valencia after the Republicans were forced to relocate their capital from Madrid. After the overthrow of the Republican government, the lottery continued uninterrupted under the Franco regime.
Australia
The first lottery in Australia took place in the 1880s in Sydney. It was a private sweepstakes that was quickly prohibited, despite being moved to other areas such as Queensland and Victoria. In 1916, the Australian government started their own lottery, named the “Golden Casket Art Union,” with the intention of raising money for charities and projects. Its first draw is credited with raising funds for veterans of World War I.
According to the January 6, 2018 article “The Golden Casket Art Union” at highgate-hill-historical-vignettes.com, the £5,000 prize money in 1929 for the Golden Casket Art Union could have purchased three average suburban houses.
Lotteries with cash prizes were illegal in Queensland up to 1931 and for this reason prizes were often works of art, giving rise to the name “Art Union.” In 1916, the first Golden Casket was initiated under the auspices of the Queensland Patriotic Fund. The prize of gold is said to have been on display in a casket or jewelry case, giving rise to the “Golden Casket” name.
To get around the cash prohibition, all the prizes were in gold and the government turned a blind eye. At that time, Australia’s currency was composed of high purity gold and silver coins. The organizers undertook to find buyers for all of the gold prizes, so that the winners received cash.
Although paper currency was introduced in 1913, gold sovereigns continued to be minted until 1931. The proceeds of the first lotteries went to support returning soldiers and to provide housing for war widows.
From 1920, the state government took over running the lotteries. This was extremely controversial at the time as there was widespread community opposition to gambling in any form. However, the state government finances under a Labor Party intent on nationalizing industries were in a perilous condition.
The amount of money involved created temptation. In 1924, for example, two clerks working in the Golden Casket Office were convicted of stealing over £400 by falsifying ticket numbers. In 1932, a scam was uncovered involving a boy at the drawing who was found to have in his possession one of the marbles used to determine the winning numbers.
All proceeds of the Casket went to support hospitals, baby clinics, bush nursing, kindergartens and so on. The Brisbane Women’s hospital was constructed in 1938 using funds of £238,000 from Golden Casket profits. Hospital treatment was also free for Queenslanders. Other states eventually followed Queensland’s lead, introducing lotteries through the 1930s.
In 2007, the Golden Casket lottery was sold to the Tatts Group for $530 million.
Canada
According to Wikipedia, Lotteries in Canada are administered by five regional organizations; the Atlantic Lottery Corporation (which serves Atlantic Canada), Loto-Québec, the Ontario Lottery and Gaming Corporation, the Western Canada Lottery Corporation — which serves Western and Northern Canada, excluding British Columbia and the British Columbia Lottery Corporation. The five regional lotteries are members of a consortium known as the Interprovincial Lottery Corporation which administrates national games, including the flagship Lotto 6/49 and Lotto Max. The five lotteries offer draw games, scratch cards and sports betting — the latter primarily under the brand Sport Select.
The largest single jackpot record in Canadian lottery history was a Lotto Max drawing on January 7, 2020, for a jackpot of $70 million.
Finland
In Finland, Veikkaus — the Finnish government-owned betting agency which holds a monopoly in the country — began selling lottery tickets in December 1970, and the first draw was televised on January 3, 1971. The lottery turned 40 on January 3, 2011, and by then the lottery had been drawn 2,126 times. Since then, there has been one lottery draw every week. Lottery game time usually ends on Saturday at 9:45 p.m., and the draw is usually held on Saturday at 10:15 p.m. Large public holidays on Saturdays may postpone the draw to Sunday. The lottery has two official supervisors; from January 3, 1971 to September 29, 2013, the lottery was televised on Yle TV1 and in October 2013, the lottery draws were postponed on MTV3 after ten evening news, because according to the Finnish Communications Regulatory Authority, the sponsorship cooperation between Veikkaus and Yle was illegal.
In the current lottery played in Finland, the player chooses seven numbers between 1 and 40 —initially, until the autumn of 1980, six numbers between 1 and 40 were chosen, then for a few years seven numbers between 1 and 37 and then seven numbers between 1 and 39. In the draw, seven numbers and one — previously three and then two — additional numbers are drawn; the line price is 1 euro. The profit categories were changed, for example, from the 2011 round 41. The main victory at that time was with 7 correct results, and the smallest victory with three actual and one additional number, the number of which was reduced from three to two. The lottery return percentage is 41.1.
Another lottery game played in Finland is Vikinglotto, which can be played in all Nordic countries as well as in Estonia, Latvia and Lithuania. In Vikinglotto, six actual numbers and two additional numbers out of 48 are drawn. There are five winning categories: 6 correct, 5 + extra number, 5 correct, 4 correct and 3 correct.
In Finland, an average of six million euros in winnings go unredeemed each year.
India
There are many lotteries in India. All lotteries are run by state governments but only 13 of the 28 Indian states allow them. The leader within Indian lotteries is the Kerala state government that started its lottery department in 1967 following the countrywide ban on private lotteries.
The Kerala State Lotteries became an inspiration for other Indian states that started their own lotteries. As of right now lotteries are available in Kerala, Goa, Maharashtra, Madhya Pradesh, Punjab, West Bengal, Assam, Arunachal Pradesh, Meghalaya, Manipur, Sikkim, Nagaland and Mizoram.
The public ban on lotteries in other states has not been very effective since several lottery providers allow Indians to play online. Indian players can play lotteries from all over the world thanks to online lottery agents and bookkeepers. Some states have tried to combat this with different measures. The state government of Tamil Nadu decided to ban GooglePay since it allows payments to online lotteries and awards its users in India with scratchcards.
Indian lotteries provide a substantial economic boost for the states that provide them. In the fiscal year 2017-2018 Kerala collected goods and services tax worth Rs 908 crore and state revenue of Rs 1,691 crore.
Malaysia
The lottery industry started operating in Malaysia in early 1969 by the Berjaya Corp. Berhad. Sports Toto Malaysia Sdn Bhd is a Malaysian company which operates in the gambling sector.
Founded and incorporated by the Malaysian government in 1969, it was focused on the commercialization of 4-digits–based games. On August 1, 1985, the government — in a non-tender privatization — sold the company to businessman Vincent Tan who merged it into his Berjaya Corp. Berhad.
Today, Sports Toto is a wholly owned subsidiary of Berjaya Sports Toto Berhad, which is listed on the main market of Bursa Malaysia. It claims to be the largest operator in Malaysia of 4D-based games with 680 sales outlets offering a total of seven games.
Mexico
The Mexican Lotería Nacional dates back to the late 18th century. The goal of the Lotería is to create jobs and to "impulse the wealth redistribution process." The Lotería is also a member of the North American Association of State and Provincial Lotteries.
Spain
As measured by the total prize payout, the Spanish Christmas Lottery is considered the biggest lottery worldwide. In 2012, if all of the tickets had been sold, the total amount payout of prizes would have been worth €2.52 billion — 70% of ticket sales. The total amount of all prizes of the first category called El Gordo — "the fat one" — was €720 million which was distributed among 180 winning tickets that win €4 million each.
For 2013, due to falling demand, the number of €20 tickets available was reduced from 180 million to 160 million, reducing the potential maximum prize pool to €2.24 billion — 70% of ticket sales, with a maximum potential El Gordo of €720 million.
Thailand
A lottery was first held in Thailand — then known as Siam — in 1874 during the reign of King Chulalongkorn (Rama V), as part of an international fair organized for his birthday. A lottery was organized in 1917 by the British government with Thai consent to help finance Britain's war effort. Lotteries were held intermittently until 1933, when they became regularized under the finance department.
The present Thai lottery is managed by the Government Lottery Office, a state enterprise managed by the Ministry of Finance. The drawings take place on the 1st and 16th of each month, with the top prize now up to 32 million baht.
Shrines of local folklore and popular religion — such as Nang Ta-Khian, a female spirit of the folkore of Thailand — are often propitiated in order to be lucky in the Thai lottery draw.
United Kingdom
The principal lottery in the United Kingdom is the National Lottery, a state-franchised lottery sanctioned by the Gambling Commission — formerly the National Lottery Commission — and established in 1994. It is operated by the Camelot Group, which was first granted the franchise in 1994. Camelot's current franchise agreement runs through 2019. 28% of National Lottery revenue — along with all unclaimed prizes — are distributed as grants to charitable causes. 12% of the revenue from the National Lottery is expected to go to the government, 5% goes to lottery retailers, 5% is retained by Camelot Group for operating costs and 50% remains for the total prize fund of which 5% is diverted to a Super Draw fund, leaving 45% for normal prizes.
Northern & Shell, a British publishing group, also operates a commercial lottery known as The Health Lottery, which distributes its revenue to support health-related charities and causes. To comply with the Gambling Act, which forbids other parties from operating a national lottery, The Health Lottery operates as an umbrella corporation representing a group of 51 society lotteries across the United Kingdom with a common drawing and prize pool. Each drawing is held on behalf of one or more of the society lotteries, whose revenues go to support health-related causes in their respective area. The Health Lottery received criticism on launch for only pledging to donate 20.3% of ticket costs to charity — compared to the National Lottery's 28% — and that the lottery's structure was designed to contravene British law regarding lotteries. In the UK, winning the lottery is correlated to expressing more preference for the Conservative Party. Winning larger prizes results in a larger shift in favor of the Conservative Party.
United States
Lotteries are operated at the state level in the U.S.; 44 states and 3 territories operate state lotteries, and nearly all of them are members of consortiums that operate regional games, and the two near-national games Mega Millions and Powerball. In January 2016, Powerball set a record for the largest lottery jackpot in U.S. history, with its January 13, 2016 draw having an estimated jackpot of $1.5 billion.
The precursor to legal lotteries were the underground "numbers game" of the 1800s, which operated out of "policy shops" where bettors choose numbers. In 1875, a report of a select committee of the New York State Assembly stated that "the lowest, meanest, worst form ... [that] gambling takes in the city of New York, is what is known as policy playing." The game was also popular in Italian neighborhoods known as the Italian lottery, and it was known in Cuban communities as bolita or "little ball". By the early 20th century, the game was associated with poor communities, and could be played for as little as $0.01. The game's attractions to low income and working class bettors were the ability to bet small amounts of money, and that bookies could extend credit to the bettor. In addition, policy winners could avoid paying income tax. Different policy banks would offer different rates, though a payoff of 600 to 1 was typical. Since the odds of winning were 1000:1, the expected profit for racketeers was enormous.
The first modern government-run U.S. lottery was established in Puerto Rico in 1934, followed by New Hampshire in 1964.
In 2018, Ohio became one of the first states to offer people a digital lottery option. The technology, developed by Linq3, allows players to play the lottery on their smart phones.
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