In 1996, lotteries in North America awarded $52 million in prizes every day – that’s $36,000 every minute, 24 hours a day. This didn’t just suddenly happen. Lotteries have been around nearly as long as civilization has been around. People love lotteries.

Lotteries Though History

‘Way Back There- Lotteries are ancient. Aside from biblical references to casting lots for reward, the first recorded mentions of draw games in history were those devised by the Romans. It was common for emperors to give their dinner party guest gifts ranging from slaves to lavish villas, all awarded as door-prize drawings.

Choosing by lot has been a method of making determinations at least as far back a biblical times, with the division of the land west of the Jordan among the tribes of Israel (Numbers 26:55). According to Proverbs 18:18, "The lot puts an end to disputes and decides between powerful contenders."

Lots also appear in the literature and traditions of Greece, India, China, Japan and Rome.

Augustus Caesar – conducted the first known public lottery for a community cause, raising funds for repair work in the city of Rome.

1420—the French city of L’Ecluse used lottery to raise money to strengthen the town’s fortifications. Prizes were in the form of goods or commodities.

1466—Bruges, Belgium, raised money for the poor.

1520—Historians credit King Francis I of France with organizing the first state lottery, which quickly became an important source of raising royal revenue.

1530—La Lotto de Firenza became the first public lottery in Italy, soon followed by similar drawings in Genoa and Venice.

1560s—the English caught lottery fever when Queen Elizabeth I authorized a state lottery to restore the nations harbors facilities.

1694—the British Parliament began using a state lottery to float a 1-million-pound loan. Tickets were 10 pounds each and the prizes were in 16-year cash annuities.

1753—A lottery raised money to start the British Museum.

1755—The first case of the Lotto Mania was reported when eager ticket-buyers broke down the doors of English ticket offices on opening day.

Lotteries in American History

1612—King James I of England raised 29,000 pounds for the Virginia Company’s expeditions to colonize America. In America, the Virginia Company financed the Jamestown Colony with a lottery.

1665—The Dutch held a lottery to raise money for the poor in New Amsterdam, the predecessor of New York.

1768—George Washington sponsored a lottery to build a road across the Blue Ridge Mountains.

A lottery sponsored by John Hancock rebuilt Boston’s Faneuil Hall after it was damaged by fire.

Lotteries financed buildings at Harvard and Yale colleges.

By one source, there were about half a dozen respectable lotteries operation in each in the 13 colonies prior to the American Revolution.

The Continental Congress saw lotteries as a means of financing a Revolutionary Army to make them independent of England- ironic since to was "taxation without representation" that was a key complaint of the colonies. Apparently they didn’t see lotteries as a tax.

Benjamin Franklin sponsored a lottery to raise money for cannons to defend Philadelphia against the British.

It was proceeds from the United States Lottery 1777 that paid for the provisions for Washington’s troops.

New Mexico Lottery History

• November 1994—Constitutional amendment allowing for creation of a lottery was approved for 54% of New Mexico voters.
  
• January 1995—New Mexico Supreme Court struck down the amendment as a violation of the state constitution.
  
• April 1995—After New Mexico State Legislature approved, Governor signed law creating the New Mexico Lottery.
  
• April 27, 1996—New Mexico Lottery launched 23 days ahead of schedule.
  
• FY96 sales were $28.4 with $6.3 million going to education. $3.4 million went to Public School Critical Capital Outlay Fund: $2.3 million went to Lottery Tuition Fund.
  
• FY97 sales were $82.1 million, with $21.9 million going to education. $12.2 Million went to Public School Critical Capital Outlay Fund; $9.7 million went to Lottery Tuition Fund.
  
• FY98 sales were $84.9 million, with $21.2 million going to education. $11.7 Million went to Public School Critical Capital Outlay Fund; $9.5 million went to Lottery Tuition Fund.
  
• FY99 sales were $89.2 million, with $19.6 million going to education. $11.7 Million went to Public School Critical Capital Outlay Fund; $9.5 million went to Lottery Tuition Fund.

Distributions by Public School Critical Capital Outlay Fund:

• $7.2 million distributed January 1997.

• $17.5 million distributed August 1997.

Lottery Success Scholarships Awarded:

• $1.4 million distributed fall 1997.
• 2,149 full tuition scholarships awarded to New Mexico colleges and universities in fall 1997.

Lottery Myths

Myth #1

Myth—Lotteries take advantage of the poorer economic strata of our society. Wrong.

The Washington Post in September 1997 commissioned a poll by Martinez Marketing of St. Louis to find out the facts about who plays the lottery.

Here are the results:

• Middle income Americans were the most likely group to play the lottery. Two out of three Americans with household incomes between $25,000 to $45,000 a year play the lottery at least once a year. One out of four play monthly. Americans earning $45,000 to $65,000 play even more often, with three of four playing occasionally while one third wager at least once a month.

On the other hand, the wealthiest and the poorest Americans were least likely to take a chance on the lottery. Half of those earning less than $25,000 a year said they never played the lottery, and about half of those earning more than $65,000 a year said they also never play.

In May, 1997 the New Republic said, "The fact is that the typical lottery player has some college and many are college graduates with an average household income of about $35,000. In Atlanta, Georgia, 33% were high school graduates, 21.7% had some college, 25% had college degrees and 10% had advanced degrees. Also, 28% had incomes between $35,000 and $49,000, and 27% had incomes of $50,000 to $74,000."

In 1996, the New Mexico Department of Health and the University of New Mexico’s Center on Alcoholism, Substance Abuse and Addictions conducted a survey of the gambling behavior of New Mexicans. That survey showed that gambling habits were very similar across lines. Asked if they had gambled in the past month, the percentage breakdown was as follows:

 Prevalence of gambling by income levels.

The only trend that leaps out of these numbers is that the higher the income level, the greater the propensity to gamble. And when asked how many had gambled in the past year, the same trend held true among the survey’s respondents. It certainly does not indicate that the lower income levels in our citizenry gamble more than the higher levels.

Myth #2

Myth—The lottery is a Tax.

Wrong.

People are forced to pay taxes; no one is forced to play the lottery. You can go to jail or lose your home for not paying taxes. You won’t go to jail for not playing lottery games. You just won’t have a chance to win cash and other prizes!

Some people say the lottery is an implicit tax, because it has relatively higher administrative costs and is less efficient way of raising money for, say, education than taxes, but its revenues go for education just as other tax money does. Playing the lottery depletes the player’s discretionary income from availability for other purchases, but so do going to the movies, ballgames, or other form of entertainment.

"Lottery agencies are not tax collectors in any normal sense but rather are state enterprises producing and selling a product to the public…Viewed as a state enterprise striving to make money, state lotteries appear remarkably successful. Product innovations and aggressive promotions have generated extraordinary growth, and their legal monopoly position has made possible a high rate of profit on sales." ("Selling Hope" by Charles T. Clotfelter and Philip J. Cook, 1991, A National Bureau of Economic Research Book, p. 219)