Lottery History – Are Lotteries Monopolies?


The practice of drawing lots to distribute property dates back to ancient times. The Old Testament script instructs Moses to take a census of the people of Israel and divide the land by lot. Lotteries were also used by Roman emperors to distribute slaves and property. Lotteries were a popular form of dinner entertainment and the Greek word apophoreta means “that which is carried home.”

Early American lotteries were simple raffles

In colonial America, lotsteries were not just fun outlets, they also provided funding for different projects. In the fifteenth and sixteenth centuries, lotteries funded charitable efforts, roads, churches, canals, and bridges. Princeton and Columbia Universities were funded by lotteries, as was the University of Pennsylvania with its Academy Lottery in 1755. Lotteries were also common during the French and Indian Wars, and in 1758, the Commonwealth of Massachusetts held a lottery to fund the construction of a road across the Blue Ridge Mountains.

Early American lotteries were monopolies

The debate over whether early American lotteries were monopolies turns to specific features of how lotteries operate. Critics point to the problem of compulsive gambling and alleged regressive effects on lower income groups as reasons for criticism. While lottery officials say they are simply raising tax revenue, they have a distorted view of the industry, which largely ignores the history of the practice.

Early American lotteries were used to give away property and slaves

The practice of giving away property and slaves through lotteries is an ancient one, dating back to the time of Moses, who is said to have ordered the Israelites to divide their land by lots. The ancient Romans also used lotteries to distribute slaves and property. The British introduced lotteries to the U.S., where they were widely used for political and social purposes. By the mid-19th century, however, ten states banned lottery sales.

Early U.S. lotteries were based on a group of numbers

The early U.S. lottery was based on a group of numbers. George Washington began conducting lotteries in 1760 to raise money for a mountain road in Virginia. Other early lottery supporters include Benjamin Franklin, who supported the use of the lottery to purchase cannons during the Revolutionary War. John Hancock also ran a lottery to rebuild Faneuil Hall in Boston, Massachusetts. According to a 1999 report by the National Gambling Impact Study Commission, most colonial-era lotteries were unsuccessful.

Early U.S. lotteries were played by syndicates

The lottery syndicate was a group of people who pooled money to purchase multiple tickets and split the prize money proportionally. It was a legal way to increase their chances of winning, as they could afford to buy more tickets than the average player. Also, they could avoid the high costs associated with buying individual tickets, which would otherwise be prohibitive for many. Syndicate winners also had fewer personal expenses.

Early U.S. lotteries were based on annuity jackpots

One of the first big lottery jackpots in the United States was in New Jersey. In August 1996, a single ticket sold in Morris Plains for $211 million would yield an annuity payout of nearly $20 million. Later, in April 2007, another ticket sold in South Carolina for $12 million would yield a $17.4 million annuity payout. This year, the jackpot in both states is $1.6 billion.

Early U.S. lotteries were regulated by state laws

Most states regulate the operation of their lottery systems, and in the case of Illinois, these regulations are even more specific. For example, if the lottery is in Illinois, the State Treasurer will execute contracts with other states’ lottery directors. The State Treasurer will then hold the proceeds in a special trust fund for prize winners, known as the “Deferred Lottery Prize Winners Trust Fund.” In some states, the Director will also have the power to contract with a bank, banking house, or investment banking firm to carry out certain financial functions for the lottery.