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# Lottery

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 Title: Lottery Author: World Heritage Encyclopedia Language: English Subject: Collection: Lotteries Publisher: World Heritage Encyclopedia Publication Date:

### Lottery

National Lottery building located in Mexico City

A lottery is a form of United States and some other countries during the 19th century, by the beginning of the 20th century, most forms of gambling, including lotteries and sweepstakes, were illegal in the U.S. and most of Europe as well as many other countries. This remained so until well after World War II. In the 1960s casinos and lotteries began to re-appear throughout the world as a means for governments to raise revenue without raising taxes.

Lotteries come in many formats. For example, the prize can be a fixed amount of cash or goods. In this format there is risk to the organizer if insufficient tickets are sold. More commonly the prize fund will be a fixed percentage of the receipts. A popular form of this is the "50–50" draw where the organizers promise that the prize will be 50% of the revenue. Many recent lotteries allow purchasers to select the numbers on the lottery ticket, resulting in the possibility of multiple winners.

The purchase of lottery tickets cannot be accounted for by decision models based on expected value maximization. The reason is that lottery tickets cost more than the expected gain, as shown by lottery mathematics, so someone maximizing expected value should not buy lottery tickets. Yet, lottery purchases can be explained by decision models based on expected utility maximization, as the curvature of the utility function can be adjusted to capture risk-seeking behavior. More general models based on utility functions defined on things other than the lottery outcomes can also account for lottery purchase. In addition to the lottery prizes, the ticket may enable some purchasers to experience a thrill and to indulge in a fantasy of becoming wealthy. If the entertainment value (or other non-monetary value) obtained by playing is high enough for a given individual, then the purchase of a lottery ticket could represent a gain in overall utility. In such a case, the disutility of a monetary loss could be outweighed by the combined expected utility of monetary and non-monetary gain, thus making the purchase a rational decision for that individual.

## Contents

• Classical history 1
• Medieval history 2
• Early modern history 3
• France, 1539-1789 3.1
• England, 1566–1826 3.2
• Early America, 1612–1900 3.3
• German-speaking countries 3.4
• Spain, 1763 3.5
• Modern history by country 4
• Australia 4.1
• Germany 4.3
• India 4.4
• States banning the lottery 4.4.1
• Israel 4.5
• Mexico 4.6
• New Zealand 4.7
• Spain 4.8
• Thailand 4.9
• United Kingdom 4.10
• United States 4.11
• Probability of winning 5
• Scams and frauds 6
• Notable prizes 7
• Payment of prizes 8
• Rollovers and Roll Downs 9
• Non-randomness 10
• References 14

## Classical history

The first recorded signs of a lottery are keno slips from the Chinese Han Dynasty between 205 and 187 BC. These lotteries are believed to have helped to finance major government projects like the Great Wall of China. From the Chinese "The Book of Songs" (2nd millennium BC.) comes a reference to a game of chance as "the drawing of wood", which in context appears to describe the drawing of lots.

From the Celtic era, the Cornish words "teulel pren" translates into "to throw wood" and means "to draw lots".

The Iliad of Homer refers to lots being placed into Agamemnon's helmet to determine who would fight Hector.

The first known European lotteries were held during the Augustus Caesar. The funds were for repairs in the City of Rome, and the winners were given prizes in the form of articles of unequal value.

## Medieval history

The first recorded lotteries to offer tickets for sale with prizes in the form of money were held in the taxation. The Dutch state-owned Staatsloterij is the oldest running lottery. The English word lottery is derived from the Dutch noun lot meaning "fate".

The first recorded Italian lottery was held on 9 January 1449 in Golden Ambrosian Republic to finance the war against the Republic of Venice.
However, it was in Genoa that Lotto became very popular. People used to bet on the name of Great Council members, who were drawn by chance, five out of ninety candidates every six months . This kind of gambling was called Lotto or Semenaiu. When people wanted to bet more frequently than twice a year, they began to substitute the candidates names with numbers and modern lotto was born, to which both modern legal lotteries and the illegal Numbers game can trace their ancestry.

English Lottery 1566 Scroll.
English State Lottery Ticket 1814 issued by broker Swift & Co.
Massachusetts Lottery Ticket 1758 French & Indian Wars
1776 Lottery ticket issued by Continental Congress to finance American Revolutionary War.
Harvard Lottery Ticket 1811
Ticket from an 1814 lottery to raise money for Queen's College, New Jersey.
New Hampshire Lottery Ticket 1964

## Early modern history

### France, 1539-1789

King Châteaurenard. This attempt was a fiasco, since the tickets were very costly and the social classes which could afford them opposed the project. During the two following centuries lotteries in France were forbidden or, in some cases, tolerated.

### England, 1566–1826

Although the English probably first experimented with raffles and similar games of chance, the first recorded official lottery was chartered by Queen Elizabeth I, in the year 1566, and was drawn in 1569. This lottery was designed to raise money for the "reparation of the havens and strength of the Realme, and towardes such other publique good workes". Each ticket holder won a prize, and the total value of the prizes equalled the money raised. Prizes were in the form of silver plate and other valuable commodities. The lottery was promoted by scrolls posted throughout the country showing sketches of the prizes.[3]

Thus, the lottery money received was an interest free loan to the government during the three years that the tickets ('without any Blankes') were sold. In later years, the government sold the lottery ticket rights to brokers, who in turn hired agents and runners to sell them. These brokers eventually became the modern day stockbrokers for various commercial ventures. Most people could not afford the entire cost of a lottery ticket, so the brokers would sell shares in a ticket; this resulted in tickets being issued with a notation such as "Sixteenth" or "Third Class".

Many private lotteries were held, including raising money for The Virginia Company of London to support its settlement in America at Jamestown. The English State Lottery ran from 1694 until 1826. Thus, the English lotteries ran for over 250 years, until the government, under constant pressure from the opposition in parliament, declared a final lottery in 1826. This lottery was held up to ridicule by contemporary commentators as "the last struggle of the speculators on public credulity for popularity to their last dying lottery".

### Early America, 1612–1900

An English lottery, authorized by King James I in 1612, granted the Virginia Company of London the right to raise money to help establish settlers in the first permanent English colony at Jamestown, Virginia.

Lotteries in colonial America played a significant part in the financing of both private and public ventures. It has been recorded that more than 200 lotteries were sanctioned between 1744 and 1776, and played a major role in financing roads, libraries, churches, colleges, canals, bridges, etc.[4] In the 1740s, the foundation of Princeton and Columbia Universities was financed by lotteries, as was the University of Pennsylvania by the Academy Lottery in 1755.

During the French and Indian Wars, several colonies used lotteries to help finance fortifications and their local militia. In May 1758, the State of Massachusetts raised money with a lottery for the "Expedition against Canada".

### Germany

In Germany, the government has a monopoly on the lottery system, where it offers a "pick 6 out of 49" system. The chances of winning the jackpot are 1 in 139,838,160.[7] A ticket would need 6 matching numbers out of 49 and an additional "super number" from 0 to 9.[8]

Winning numbers are drawn twice a week, on Wednesday and Saturday. The German lottery has some additional games, such as Super6, Spiel77 and Glücksspirale. The highest jackpot ever won was on 5 December 2007 where 3 people shared 45,382,458 euros. This is about 2 million euros less than the highest jackpot possible. The lowest jackpot ever won was in 1984 where the winner with the numbers 1, 3, 5, 6, 9, 12, 25 received only DM 16,907 (8,644.41 euros).

### India

There are many lottery games that take place in India, all of which are run by state government organisations under the rules and regulations of the federal government.

State governments such as those of Kerala, Punjab, Goa and Sikkim, run their own lottery departments and conduct lucky draws daily or weekly. Kerala State Lotteries, established in 1967, under the lottery department by the Government of Kerala was the first of its kind in India. The department was successful and has grown throughout the state of Kerala by contributing to the needful and became the role model for other states for starting their own lotteries.

#### States banning the lottery

On January 8, 2003, the Tamil Nadu government banned the sale of all forms of lottery by agencies from and outside the state.[9] This ban has been upheld by successive governments. But it has been withdrawn and for the last few years Kerala and all other State Government lotteries are being sold in Tamil Nadu.

### Israel

While gambling is illegal in Israel, the Mifal HaPayis or national lottery was established in August 1951 to recruit funding for the construction of a hospital in Tel Aviv.

Games include the flagship lottery, Chance, Keno, 777, 123, Hish Gad (themed scratchcard games), lottery subscriptions and the Big Lottery.

### Mexico

The Mexican Lotería Nacional dates back to the late 18th century. The goal of the Lotería is to create jobs and to "impulse the wealth redistribution process".[10] The Lotería is also a member of the North American Association of State and Provincial Lotteries.[11]

### New Zealand

In New Zealand, lotteries are run by the New Zealand Lotteries Commission, a Crown entity. It runs Lotto NZ, including Powerball and Strike!, Big Wednesday, Instant Kiwi, Bullseye and Keno.

### Spain

As measured by the total prize payout, the Spanish Christmas Lottery is considered the biggest lottery worldwide. In 2012, if all of the tickets had been sold, the total amount payout of prizes would have been worth €2.52 billion (70% of ticket sales). The total amount of all prizes of the first category called El Gordo ("the fat one") was €720 million which was distributed among 180 winning tickets (billetes) that win €4 million each.

For 2013 the number of series (see below) was changed from 180 to 160, and so the total amount payout of prizes would be worth €2.24 billion (still 70% of ticket sales).

### Thailand

A lottery was first held in

• World Lottery Association