Lottery in the United States
Lotteries have been in the United States since colonial times. When Ben Franklin said that death and taxes were the only sure things in life, he was not talking about income taxes. Income taxes were not around during his time. He was talking about the government revenues of tariffs, excise taxes, and lotteries.

History of the Lottery in the United States

In the 17th century, the Virginia Company established the first public/private lottery in the United States. The income from this lottery built roads, schools, bridges, churches, and other needed structures. Soon, this system spread to all thirteen colonies as a way to raise funds.

George Washington sponsored public lotteries to build roads in the Shenandoah Valley. Private lotteries were also established to raise money for universities. Some of the schools built with lottery funds are Harvard, Dartmouth, William and Mary, Yale, and Columbia.

Thomas Jefferson even sponsored a private lottery to help pay his enormous personal debt. The British government created laws in 1769 that limited the use of lotteries in the colonies. Ironically, the lottery was used to fund the Revolutionary War. One lottery achieved over $10,000 to buy cannons for the Continental Army.

The lottery was used to rebuild the United States after the Revolutionary War, also. Washington DC was built with the revenue from a national lottery during the 1820s. Cohens v. Virginia was a result of the federal government trying to sell national lottery tickets that competed with a state lottery.

Lotteries continued to develop. After the Civil War, lotteries were used to rebuild the south. The North had, for the most part, outlawed lotteries, so the south had cornered the market. The south even mailed tickets to Northerners. The federal government, in 1878, banned lotteries temporarily.

The government was unable to use the lottery system, and it needed money, so in 1913, the federal government created the first income taxes.

The state lottery system, used today, was started in 1963. The lotteries were begun to lower state taxes, and the revenue was used to pay for educational needs. Today, forty-four states participate in some form of a state lottery.

The private lotteries have also started again. Yotto.org is an example of a private lottery out of New York City. This lottery supports the arts, technology, charities, and private businesses. Some people even use Yotto.org to pay off private debts.

States and Territories That Participate in Lotteries

The following states/territories participate in state lotteries:

Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, U.S. Virgin Island, Washington DC, and Puerto Rico.

The following states/territories also participate in joint-state lotteries:

Arkansas, Connecticut, Delaware, Washington DC, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, and West Virginia.

The following states/territories do not participate in either state lotteries or joint-state lotteries:

Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah.

The Revenue from Lotteries

Many state lotteries provide massive revenue for the state. In 2009, the estimated profit for states was over $17.6 billion. Some states even collected more from their state lotteries than from their state corporate income taxes.

The states not receiving this revenue have their reasons for not allowing lotteries. Alabama, Mississippi, and Utah have religious oppositions to gambling. Nevada’s large gaming industry lobbies against a state lottery because it fears it will be too much competition. Mississippi’s gaming community feels the same way as Nevada’s and fears the casinos would lose customers.

Alaska and Hawaii do not feel any pressure of losing sales to outside competitors because they are not part of the contiguous United States.

Joint-State Lottery Games

In 1985, the first joint-state lottery was formed in New Hampshire, Vermont, and Maine. Iowa, Kansas, Missouri, Oregon, Rhode Island, Washington DC, and West Virginia established the Multi-State Lottery Association in 1988. This association created what is now called Powerball and Mega Millions.

Today, all states that have a state lottery system offer the Powerball and Mega Millions. Washington DC and the Virgin Islands also offer both of these games. Puerto Rico, however, only offers the Powerball game.

Some other states have joined to create smaller joint-state lottery games. The following states created these games:

• 2by2 includes Kansas, Nebraska, and North Dakota.

• All or Nothing involves Iowa and Minnesota (Do not get this game confused with one-state games with the same format and name).

• Pennsylvania, Tennessee, Virginia, Florida, Georgia, Indiana, Maryland, New Jersey, and New York offer the game called Cash4Life.

• Fourteen states offer Hot Lotto (Delaware, Iowa, Idaho, Kansas, Maine, Montana, Minnesota, New Hampshire, New Mexico, North Dakota, South Dakota, West Virginia, Vermont, Tennessee).

• Twenty-three states joined forces to create the Lucky for Life game (Arkansas, Colorado, Connecticut, Delaware, Washington DC, Idaho, Kansas, Iowa, Kentucky, Maine, Massachusetts, Michigan, Missouri, Montana, Minnesota, New Hampshire, North Carolina, North Dakota. Ohio, Rhode Island, South Carolina, Vermont, Wyoming). In 2017, Nebraska, South Dakota, and West Virginia joined the states playing this game.

• MegaHits is a video slot game that Delaware, Maryland, Ohio, Rhode Island, and West Virginia play.

• Maine, New Hampshire, and Vermont offer a Tri-State Lottery that includes games such as Megabucks Plus, Pick 3, Pick 4, and Fast Play.