The History of the Lottery


A lottery is a game of chance that has been around for centuries. The earliest written records refer to drawing lots to determine ownership of property. In the late fifteenth and sixteenth centuries, lotteries became increasingly common throughout Europe. In 1612, King James I of England introduced a lottery to fund the settlement of Jamestown, Virginia. Since then, the lottery has grown to become a major funding source for private and public organizations, generating money for wars, colleges, and public works projects.

State governments operate U.S. lotteries

In the United States, forty states and the District of Columbia operate lotteries. Two more are planning to do so in the future. In November, voters in Oklahoma approved a referendum that would allow the state to operate a lottery. Previously, Oklahomans rejected the idea, but a costly pro-lottery campaign swayed them to approve it.

While a state may be in the best position to regulate its lotteries, the government isn’t the only stakeholder. Unlike commercial lottery operators, state governments run lottery operations to generate tax revenue. This isn’t always the best decision. While the state’s revenues may be low, the state can use the money it generates to support its programs.

Number of games

Lotteries are divided into several categories. Pick 5 is one example of a lottery game. This game allows players to choose five numbers from a field of five. The prize structure for the game is fixed and is not based on the number of tickets sold. Multijurisdictional games like Mega Millions are also a common type of lottery. The jackpots for these games can be enormous.


The Minnesota Lottery drastically reduced sponsorship expenses for 2004. In 2002, the lottery sponsored 30 different organizations and is planning to sponsor just seven in 2004. As a result, the lottery will no longer sponsor the Minnesota Twins, Minnesota Vikings, Minnesota Wild, or Minnesota Timberwolves. It also will no longer sponsor the University of Minnesota’s athletics.

The costs of running the Lottery are a big concern. It is estimated that Lottery operations accounted for about a third of the revenue received from the lottery. The commissions paid to Lottery retailers in 1998 ranged from $22 million to $25 million, or five to nine percent of total sales. However, the Legislature increased commissions by one percent in 1999 and another one percent in 2000. In this timeframe, the Lottery’s costs jumped to $30 million (inflation-adjusted), or 6.8 percent of total sales.


The first recorded money prizes in a lottery were sold in the Low Countries around the 15th century. Towns held public lotteries to raise funds for fortification and poor relief. However, there are also evidences that the first lotteries were even older. For example, a record from 9 May 1445 in L’Ecluse mentions that a lottery was sold to raise funds for the walls of the town. The prize was 1737 florins, which is about $170,000 today.

But it’s important to remember that winning a lottery prize is no guarantee of easy street. The National Endowment for Financial Education estimates that about 70 percent of lottery winners go broke within a few years.

Tax implications

Winning the lottery is a dream come true for many people, but winning the lottery also means having to pay taxes on the winnings. This money can be used for a variety of things, including buying luxury items, quitting your job, and travelling the world. This article explains the tax implications of lottery winnings and gives tips on how to minimize them.

While the federal government takes a large percentage of your winnings, some states also levy a small amount of tax. For example, in New York City, you will pay about 3.76% in tax on the prize money. And in Yonkers, you’ll pay about 1.477%. The amount of tax due is calculated based on your tax bracket.