Pennsylvania citizen Mary Ann Gilliam, left, is assisted by Pennsylvania Lottery district manager Peter H. Cardiges as she selects a number for a lottery drawing in Pittsburgh on September 19, 1980. Gene Puskar/AP
One incredibly fortunate individual in Florida has just won a staggering $1.58 billion in the Mega Millions jackpot, with an estimated pre-tax payout of $783.3 million. The Mega Millions game was established in 1996 and is now played in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Its counterpart, Powerball, debuted in 1988 as Lotto America and is currently offered in the same states as Mega Millions, excluding Puerto Rico. Only Alabama, Alaska, Hawaii, Nevada, and Utah do not sell lottery tickets. In short, state lotteries are thriving, with an approximate $100 billion spent annually by Americans on tickets. However, this was not always the case. The history of lotteries, both as public and private games, has had a long and sometimes turbulent journey in the U.S. Here are three key things to know about them.
America’s earliest settlers brought the lotto tradition with them. In 1612, the Virginia Company of London was granted authorization by King James I to conduct a lottery in order to assist in financing ships for the Jamestown colony in Virginia. Despite Puritan opposition to gambling, which they regarded as disrespectful to God and a gateway to further sins, “gambling became an established and controversial feature of New England life by the 1670s,” according to the Colonial Williamsburg website. Lotteries thrived in the American colonies during the mid-to-late 1700s, and the generated proceeds were used to construct roads, bridges, churches, and colleges, as confirmed by Victor Matheson, an economics professor at the College of the Holy Cross and a lottery expert. “Lotteries have been a part of the United States for an incredibly long time, and many significant events in U.S. history were financed by them.” The founding fathers were also avid supporters of lotteries. In 1748, Benjamin Franklin organized a lottery in Philadelphia to aid in funding the establishment of a militia for defense against attacks by the French, as documented by the Library Company of Philadelphia. Matheson notes that John Hancock organized a lottery to construct Boston’s Faneuil Hall, and in 1767, George Washington hosted a lottery to build a road in Virginia through a mountain pass. Unfortunately, the Mountain Road Lottery did not raise enough funds to make the project viable. Thomas Jefferson even declared lotteries as essential to people’s existence, stating that “every individual has a natural right to pursue the one they consider most likely to provide subsistence for them.” Around 1800, Denmark Vesey, an enslaved individual in Charleston, S.C., won a local lottery and utilized the winnings to purchase his freedom. Vesey was later executed for his involvement in planning a failed slave rebellion in 1822.
Lotteries gradually disappeared by the late 1800s. The same religious and moral concerns that eventually led to prohibition were also responsible for turning public opinion against all forms of gambling in the 1800s, according to Matheson. Additionally, corruption within lottery organizations added to their downfall. Lottery organizers could simply sell tickets and keep the proceeds without awarding any prizes. Matheson states, “The decline of lotteries can be attributed partly to religious and social disapproval, but it also includes a measure of public policy and welfare protection in order to eliminate corrupt lotteries.” The Louisiana Lottery Company, a private enterprise established in 1868 by a group of entrepreneurs, sold tickets far beyond the boundaries of the state, with only around 7% of the company’s revenue coming from Louisiana, as mentioned on Lousianalottery.com. However, in 1890, Congress prohibited the interstate promotion and sale of lottery tickets. This resulted in the closure of the Louisiana company due to accusations of corruption at both state and national levels. “The company relocated to Honduras after the federal government enacted laws banning the sale of lottery tickets through the mail. By 1894, legal lotteries were no longer held in the U.S.”
State lotteries made a resurgence starting in the 1960s. The post-World War II prosperity enjoyed by the U.S. enabled states to offer a wider range of state services without increasing taxes, according to Jonathan Cohen, author of “For a Dollar and a Dream: State Lotteries in Modern America.” Cohen explains to WBUR’s On Point, “This prosperity starts to grind to a halt in the 1960s due to inflation and increased spending on the Vietnam War, leading to budgetary shortfalls.” Despite this, voters desired to maintain the services they had become accustomed to without incurring higher taxes. The revival of lotteries began in 1964 with New Hampshire, which at the time was one of only three states without a sales or income tax, making it heavily reliant on property taxes. Cohen emphasizes that New Hampshire aimed to establish “credibility” for lotteries, even though concerns persisted regarding potential corruption and infiltration by organized crime. By the 1980s, a wave of states followed suit, entering the lottery game. Matheson highlights that once one state legalizes lotteries, neighboring states tend to follow suit quickly. “The adoption of lotteries by states spreads geographically, with neighboring states often legalizing lotteries shortly after one state does. Consequently, we witnessed the spread of lotteries across the United States in this manner,” he explains. Multi-state lotteries like Powerball and Mega Millions emerged in the mid-1980s as smaller states joined forces to increase jackpot sizes and attract more participants. Mississippi was the most recent state to approve a lottery in 2019. Although the odds may be in favor of the lotteries today, for anyone purchasing a ticket, the chances of winning have steadily decreased as jackpots and the number of players have grown. For Mega Millions, the odds of winning are roughly 1 in 302.6 million. Good luck.