Lotteries in the United States

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In the United States, lotteries are run by 48 jurisdictions: 45 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

Lotteries are subject to the laws of and operated independently by each jurisdiction, and there is no national lottery organization. However, consortiums of state lotteries jointly organize games spanning larger geographical footprints, which in turn, carry larger jackpots. Two major lottery games, Mega Millions and Powerball, are both offered in nearly all jurisdictions that operate lotteries, and serve as de facto national lotteries.

In fiscal 2018, Americans spent $77.7 billion on various lotteries, up about $5 billion from 2017.[1]

History[edit]

Gambling as a generalization has roots in the United States and other English colonies as far back as the 1600s.[2] Not every colony allowed gambling, however. The Massachusetts Bay Colony, for example, did not allow cards, dice or gaming tables, even in private residences.[2] In most colonies however, gambling was seen as a harmless distraction as long as it was played in a gentlemanly manner.[2]

The acceptance of gambling in the colonies was fairly short-lived by English investors because it was seen as a sign of laziness and as a vice.[2] The investors saw gambling as a root cause of the colonies' inability to sustain themselves.[2]

Lotteries were used not only as a form of entertainment but as a source of revenue to help fund the colonies. The financiers of Jamestown, Virginia, for instance, funded lotteries to raise money to support their colony.[2] These lotteries were quite sophisticated for the time period and even included instant winners.[2] Not long after, each of the 13 original colonies established a lottery system to raise revenue.[2]

In early American history, legislators commonly authorized lotteries to fund schools, roads, bridges, and other public works.[3] Evangelical reformers in the 1830s began denouncing lotteries on moral grounds and petitioned legislatures and constitutional conventions to ban them.[4] Recurring lottery scandals and a general backlash against legislative corruption following the Panic of 1837 also contributed to anti-lottery sentiments.[4] From 1844 to 1859 alone, 10 new state constitutions contained lottery bans.[4] By 1890, lotteries were prohibited in every state except Delaware and Louisiana.[5]

Early lotteries[edit]

Lotteries in the United States did not always have sterling reputations.

One early lottery in particular, the National Lottery, which was passed by Congress for the beautification of Washington, D.C. and was administered by the municipal government, was the subject of a major U.S. Supreme Court decision – Cohens v. Virginia.[6]

The lottery never paid out,[2][clarification needed] and it brought to light the prevalent issue of crookedness amongst the lotteries in the United States. The wave of anti-lottery protests finally broke through when, by 1860, all states had prohibited lotteries except Delaware, Missouri, and Kentucky.[2] The scarcity of lotteries in the United States meant that tickets were shipped across the country and eventually led to the creation of illegal lotteries.[2] In 1868, after years of illegal operation, the Louisiana State Lottery Company obtained a 25-year charter for its state lottery system.[2] The charter was passed by the Legislature due to immense bribing from a criminal syndicate in New York.[2] The Louisiana Lottery Company derived 90% of its revenue from tickets sold across state borders.[2] These continued issues of corruption led to the complete prohibition of lotteries in the United States by 1895.[2] It was discovered that the promoters of the Louisiana Lottery Company had accrued immense sums of money from illegitimate sources and that the Legislature was riddled with bribery.[2]

Before the advent of government-sponsored lotteries, many illegal lotteries thrived, such as number games. The first modern government-run US lottery was established in Puerto Rico in 1934.[7] This was followed, decades later, by the New Hampshire lottery in 1964.

Instant lottery tickets, also known as scratch cards, were introduced in the 1970s and have become a major source of lottery revenue. Individual lotteries often feature three-digit and four-digit games akin to numbers games; a five number game, and a six number game (the latter two often have a jackpot.) Some lotteries also offer at least one game similar to keno, and some offer video lottery terminals. Presently, many US lotteries support public education systems.

As of November 2018, lotteries are established in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands; the most recent U.S. state to legalize a lottery is Mississippi, with lottery commission members receiving appointments on October 19, 2018.[8] Ticket sales for the Mississippi Lottery are expected to begin in 2019.

The first U.S. multi-state lottery game was formed in 1985 in Maine, New Hampshire, and Vermont; its flagship game remains Tri-State Megabucks. In 1988, the Multi-State Lottery Association (MUSL) was formed with Iowa, Kansas, Missouri, Oregon, Rhode Island, West Virginia, and the District of Columbia as its charter members; it is best known for Powerball, which was designed to create large jackpots. Another joint lottery, The Big Game (now called Mega Millions), was formed in 1996 by six other lotteries as its charter members.

As of November 2018, each of the 44 state lotteries offer both Mega Millions and Powerball as a result of a 2009 agreement between the Mega Millions consortium and MUSL to cross-license their game to one another's members, although the two organizations continue to administer Mega Millions and Powerball separately. The District of Columbia and the U.S. Virgin Islands also offer both games. (The Puerto Rico Lottery does not offer Mega Millions.)

State revenues[edit]

State lotteries have become a significant source of revenue for states, raising $17.6 billion in profits for state budgets in the 2009 fiscal year (FY) with 11 states collecting more revenue from their state lottery than from their state corporate income tax during FY2009.[9]

Lottery policies within states can have conflicting goals.[10] Given that instructions are passed down from state legislatures, lottery implementation is often expected to be carried out with reduced advertising and funding while still producing the same amount of revenue.[10] This issue led states to look for loopholes in the system. Massachusetts, for example, had its advertising budget dramatically cut, and therefore started using free-play coupons as money to pay for advertising.[10] This led to an IRS investigation into alleged non-reporting of income because the IRS considered the coupons to have monetary value.[10]

States with no lotteries[edit]

Among the states that do not have lotteries, Alabama and Utah cite religious objections.[11] Nevada's lucrative gambling industry has lobbied against a state lottery there, fearing the competition;[12] similarly, the Mississippi Gaming Commission expressed concern that a state lottery would constitute a "competing force" for gambling dollars spent at Mississippi casinos.[13] Despite this, in August 2018, Mississippi passed legislation to create a state lottery. The governor expressed his support for the lottery to fund transportation in the state and has indicated he will sign the bill. Sales are expected to begin sometime in 2019.[14] Alaska and Hawaii, being outside the contiguous United States, have not felt the pressure of losing sales to competitors.[11]

New technologies[edit]

In recent years, new applications such as Lottery.com and Jackpocket were created for people to purchase lotteries over their smartphones.[15]

U.S. lotteries[edit]

A map of the United States with the states with lotteries highlighted
Map showing U.S. lottery jurisdictions (in blue) - States highlighted offer Mega Millions and Powerball as of May 15, 2013; the District of Columbia and the U.S. Virgin Islands each also offer both games
State or Territory Lottery Year of
First
Ticket Sales
Other
Joint
Games
Alabama No
Alaska No
Arizona Yes 1981 0
Arkansas Yes 2009 LFL
California Yes 1985 0
Colorado Yes 1983 LFL
Connecticut Yes 1972 LFL
Delaware Yes 1974 LA, LFL
District of Columbia Yes 1982 LFL
Florida Yes 1988 C4L
Georgia Yes 1992 C4L
Hawaii No
Idaho Yes 1989 LA, LFL
Illinois Yes 1974 0
Indiana Yes 1989 LFL
Iowa Yes 1985 AoN, LA, LFL
Kansas Yes 1987 2by2, LA, LFL
Kentucky Yes 1989 LFL
Louisiana Yes 1991 0
Maine Yes 1974 LA, LFL, TSM
Maryland Yes 1973 C4L
Massachusetts Yes 1971 LFL
Michigan Yes 1972 LFL
Minnesota Yes 1988 AoN, LA, LFL
Mississippi Yes[14]
Missouri Yes 1986 LFL
Montana Yes 1986 LA, LFL
Nebraska Yes 1993 2by2, LFL
Nevada No
New Hampshire Yes 1964 LFL, TSM
New Jersey Yes 1969 C4L
New Mexico Yes 1996 LA
New York Yes 1967 C4L
North Carolina Yes 2005 LFL
North Dakota Yes 2004 2by2, LA, LFL
Ohio Yes 1974 LFL
Oklahoma Yes 2005 LA, LFL
Oregon Yes 1985 0
Pennsylvania Yes 1972 C4L
Puerto Rico Yes 1934 0
Rhode Island Yes 1974 LFL
South Carolina Yes 2002 LFL
South Dakota Yes 1987 LA, LFL
Tennessee Yes 2004 C4L, LA
Texas Yes 1992
Utah No
U.S. Virgin Islands Yes 1937 0
Vermont Yes 1978 LFL, TSM
Virginia Yes 1988 C4L
Washington Yes 1982 0
West Virginia Yes 1984 LA
Wisconsin Yes 1988 0
Wyoming Yes 2013 LFL
Key

AoN = All or Nothing
C4L = Cash4Life
LA = Lotto America
LFL = Lucky for Life
TSM = Tri-State Megabucks consortium

Other joint U.S. lotteries[edit]

These games also are offered by multiple lotteries.[16] Some of these games feature a shared progressive jackpot (noted by °):

  • 2by2 (3 lotteries): Kansas, Nebraska, North Dakota
  • All or Nothing: Iowa and Minnesota (several other draw games with this name and format are one-state games)
  • Cash4Life (9): Florida, Georgia, Indiana, Maryland, New Jersey, New York, Pennsylvania, Tennessee, Virginia
  • Lotto America° (13): Delaware, Idaho, Iowa, Kansas, Maine, Minnesota, Montana, New Mexico, North Dakota, South Dakota, Tennessee, Vermont, West Virginia
  • Lucky for Life (25): Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Rhode Island, South Carolina, South Dakota, Vermont, Wyoming
  • Tri-State Lottery (Megabucks Plus°, Pick 3 (Day & Night), Pick 4 (Day & Night), Fast Play°): Maine, New Hampshire, Vermont

See also[edit]

References[edit]

  1. ^ Horton, Alex (2018-10-18). "How Mega Millions and Powerball changed the odds to create monster jackpots". The Washington Post. Retrieved 2018-10-19.
  2. ^ a b c d e f g h i j k l m n o p Roger Dunstan (January 1997). "History of Gambling in the United States". Archived from the original on September 10, 2010.
  3. ^ McMaster, John Bach (1911). A History of the People of the United States: From the Revolution to the Civil War. Appleton and Company. p. 588.
  4. ^ a b c Szymanski, Ann-Marie E. (2003). Pathways to Prohibition: Radicals, Moderates, and Social Movement Outcomes. Duke University Press. pp. 95–96. ISBN 978-0-8223-3169-8.
  5. ^ John Houston Merrill; Charles Frederic Williams; Thomas Johnson Michie; David Shephard Garland (1890). The American and English Encyclopædia of Law: Least to Mail. Edward Thompson Company. p. 1172.
  6. ^ Jean Edward Smith, John Marshall: Definer Of A Nation, New York: Henry Holt & Company, 1996, pp. 456-459
  7. ^ "Ley Núm. 74 de 2006 -Ley del Programa de Ayuda a Jugadores Compulsivos de Puerto". Lexjuris.com. Retrieved July 26, 2012.
  8. ^ Howard, Morgan. "Gov. Bryant appoints MS Lottery Corporation board of directors". http://www.wlox.com. Retrieved 2018-10-22. External link in |work= (help)
  9. ^ "U.S. lotteries and the state taxman". Reuters. July 15, 2011.
  10. ^ a b c d NGISC (August 3, 1999). "National Gambling Impact Study Commission Lotteries".
  11. ^ a b "Seven states that don't have lotteries". CNN Money. December 17, 2013. Retrieved November 11, 2014.
  12. ^ "Knowing Vegas: Why doesn't Nevada have a state lottery?". Las Vegas Review-Journal. April 11, 2014. Retrieved November 11, 2014.
  13. ^ "Lawmakers Looking at Lottery Plan". WLBT News, Jackson, Mississippi. February 18, 2008. Retrieved June 18, 2016.
  14. ^ a b Press, The Associated, Mississippi lottery bill passes House, headed to governor, retrieved August 29, 2018
  15. ^ ABC News (September 29, 2015) Jackpocket App Allows You to Buy Lottery Tickets Using Your Phone.
  16. ^ [1]