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A history of lotteries

Field: History. This page was last modified on 17 August 2026.

The lottery is the oldest form of organised chance still running in recognisable form, and it has always been about public money as much as about prizes. Its history is a repeating cycle: a state adopts a draw to fund something it cannot easily tax for, private operators follow, scandal arrives, prohibition follows, and a later generation reintroduces the draw under tighter control.

Draws as public finance

Lotteries in the modern sense, tickets sold broadly and prizes drawn by lot, appear in the town records of the Low Countries in the fifteenth century, raising money for fortifications and for poor relief. The attraction to a public authority was straightforward. A draw raised money from people who bought willingly, it required no assessment machinery, and it produced a defined sum for a defined purpose.

The device moved quickly into royal finance. France established a royal lottery in 1539 under Francis the First. England held a state lottery in 1567, advertised for the repair of harbours and other public works, with prizes paid partly in plate and tapestry. In both cases the state was not running a gambling business as such; it was borrowing against enthusiasm.

The Genoese format

The number-draw format that still dominates came from Genoa, where the practice of wagering on which names would be drawn to fill public offices was abstracted into a draw of five numbers from ninety. The abstraction mattered: once the draw is of numbers rather than of tickets, the number of possible outcomes is enormous and fixed by the format, so very long odds and correspondingly large prizes become possible without printing an impractical quantity of tickets.

The arithmetic is the same as that described in probability and odds. Choosing five numbers from ninety produces about forty-four million combinations, which is why a modern pooled-jackpot game can advertise a prize far larger than any single draw's ticket sales: the prize is funded from many draws, most of which produce no top winner.

Colonial and eighteenth-century expansion

In the British colonies in North America, lotteries were a standard instrument of local finance, used to fund roads, bridges, churches and colleges through the eighteenth century. The Continental Congress attempted one to fund the revolutionary war. In Britain, state lotteries ran on and off until 1826, when the practice was abandoned after decades of criticism of the ticket brokers who had grown up around it.

That criticism is worth noting because it recurs in every later cycle. The objection was rarely to the draw itself. It was to the intermediaries: the brokers who divided tickets into shares, sold insurance against losing, and ran side bets on the results of the official draw. The state's game was orderly; the market that formed around it was not.

Scandal and suppression

The nineteenth century ended the first era. In the United States, a single privately operated lottery chartered in Louisiana came to sell tickets across the country by post, and the corruption around its charter made it a national issue. Federal legislation in 1890 barred lotteries from the mails, and further legislation in 1895 barred them from interstate commerce, which finished the format as a business. By the turn of the century, legal lotteries had disappeared from most of the English-speaking world.

Prohibition did not end the activity. Illegal number games operated in cities throughout the first half of the twentieth century, often settling their draws on some public figure that could not easily be manipulated, such as published financial or racing totals. The persistence of those games under prohibition became one of the main arguments for the next reversal.

The modern state monopoly

The revival began in the 1960s. New Hampshire ran the first modern American state lottery in 1964, framed as an alternative to a sales or income tax; other states followed through the 1970s and 1980s. Britain established a national lottery in 1994, with proceeds directed to defined good causes. The pattern that emerged almost everywhere was a monopoly, granted either to the state directly or to a single licensed operator, with a statutory allocation of proceeds.

The mathematics of these games sets them apart from casino games. The share retained is typically far larger than any house edge at a table, often around half the money staked, and the odds against the top prize are longer than in any other common game. What sustains them is not the price but the prize structure: a very large advertised sum, funded by rollovers, sold in very small units. That is a deliberate design choice of exactly the kind described in game design.