The first known lottery was created in 1776 by the Continental Congress, with the intention of raising funds for the American Revolution. It was later abandoned, but smaller public lotteries continued and helped build many American colleges. Lotteries were also common in private homes, and in the United States, both Harvard and Yale established them to raise money for dormitories. Yale’s first lottery was worth PS3,200 in 1747, but Harvard waited until 1765 to receive approval to hold a similar lottery.
The lottery was banned in 1840, and in 1895 only two states still conducted it. After the ban, however, lotteries re-emerged as a viable source of revenue for governments. Today, there are more than eighty million players in the United States, and more than one billion dollars were made through lottery games in the past year. Despite the recent recession, lottery sales continue to grow. The lottery industry is a $16 billion business.
The practice of drawing lots to determine property ownership dates back to ancient times. The Old Testament instructs Moses to take a census of the people of Israel, and divide their land by lot. Lotteries in Europe were common in the late fifteenth and sixteenth centuries. The first recorded lottery was in 1612, when King James I of England created a lottery to help the settlement of Jamestown, Virginia. Later, public and private organizations used lottery funding to build towns, fund wars, build colleges, and complete public-works projects.
There are about 186,000 retail outlets selling lottery tickets nationwide. During the last fiscal year, almost $23 million of the sales came from 60609. Those residents are significantly poorer than their white counterparts. While three-fourths of lottery retailers offer their services online, half are convenience stores and other outlets. These include newsstands, restaurants, and nonprofit organizations. The majority of states do not limit the number of retailers that sell lottery tickets.
Despite these negative consequences, state-sanctioned lotteries are still a way to raise revenue for governments. European immigrants and states used the money raised by lotteries to build roads and other infrastructure. American legislators view lottery play as a benign form of gambling, but it has had mixed results. While many people believe that playing the lottery is harmful, others think that the money raised by the lottery should go to education, health care, and infrastructure.
While there are no definitive studies to back up these claims, there is evidence that the lottery is beneficial to the economy. In Georgia, for instance, lottery-funded prekindergarten programs are more popular among those with less income, while higher-income residents are less likely to participate. Moreover, it has been found that lottery players are more likely to purchase lottery tickets outside of their neighborhoods. Higher-income people often pass through low-income neighborhoods, and lottery outlets in such areas are not common in high-income residential communities.
State lottery revenues are small compared to the overall revenue of state governments. According to research by Charles T. Clotfelter and colleagues at the turn of the century, lottery profits make up between 0.67% and 4.07% of general revenue. On average, lottery revenues are about 2.2% of state general revenues. This compares to 25 percent in income taxes and general sales taxes. The numbers in table 7.2 are not representative of all state lotteries, so the figures may be different.