A lottery in the sense of a gamble for pleasure is basically a distribution of prizes to winning bettors who are decided by the drawing of numbers from a container; the prizes, of course, go to the people holding duplicates of the numbers drawn.
A ticket-holder’s bet is the money he pays for his ticket. All the tickets not actually drawn from the container are worthless (i.e., “blanks”) and a ticket-holder’s chances are decided by (a) the total number of tickets in the container; (b) the number of prizes ; and (c) the number of tickets he has bought. In a true lottery (as opposed to a pool or a sweepstake), there are specified prizes that remain the same irrespective of the number of people who buy tickets. In pools or sweepstakes, however, winners share all the money in the pool (i.e., the stakes), which varies according to the number of tickets sold. Of course, running expenses are deducted first, and a certain prearranged percentage may go to a cause for which the lottery was held.
All lotteries are basically simple, though the means of administering them may be enormously complex, as in the case of the Irish Sweepstakes (of which more later). The simple principle of the lottery has a great variety of manifestations, including sports pools, bingo, government bonds, raffles run by private and usually charitable organizations, keno (a variation of bingo), and various forms of the numbers game (based on some arbitrary figure such as a stock-exchange daily balance). But none of these requires more effort on the gambler’s part than simply buying a ticket, or going through a simple routine like watching a numbered card (as in bingo) or filling in a coupon (as in the various kinds of sports pools).
A lottery can be complicated slightly by being linked with some other event, such as some kind of race. A number of tickets are drawn equal to the number of entrants in the race (all other tickets are then blanks); and the ultimate winner out of these few is decided by the entrant who wins the race. Additional prizes diminishing in value are usually awarded to those who have drawn the second, third, and fourth entrants, and consolation prizes are sometimes awarded to all who have drawn entrants.
This is the basic principle by which winners of the Irish Sweepstakes are chosen.
Lotteries involving the placing of stakes (as distinct from acts of sortilege to make important decisions) are not very old. The Romans had a form of lottery that had no blanks and required no stakes, but this was virtually a distribution of free gifts given by rich emperors and aristocrats during the Satumalian feasts. The first recorded lottery to involve the buying of tickets and the distribution of prize money was held in Bruges on February 24, 1466. It was organized by the widow of the Flemish painter Jan van Eyck in order to raise money for the poor of the town.
Europe’s next lottery didn’t appear until 1520, when King Francis I of France signed a bill that legalized lotteries and authorized the setting up of five wheels (that is, containers of tickets for the draw) in Paris, Lyons, Strasbourg, Bordeaux, and Lille.
In Genoa and Venice, also in the 16th century, merchants began to organize public lotteries whenever they had some especially valuable produce to dispose of; in this way their profit would always exceed the sum that they would normally have got from an individual.
Public lotteries have been popular in Europe from the 16th century onward-popular with the people as an enjoyable gamble, and with the organizers as a nearly foolproof way to raise money. By 1566 the lottery idea had caught the imagination of the English. The southeast coastal towns of Hastings, Romney, Hythe, Dover, and Sandwich (known as the Cinque Ports) all needed costly harbor repairs. The people of these ports, losing time and money through constant labor at makeshift repairs to combat the ravages of stormy winters, threatened an uprising; the mayor sought advice from the Warden of the Ports, who went to Queen Elizabeth I. And it was she who, as it were, set the first English lottery wheels in motion by authorizing a state lottery to pay for repairs to the harbors. It was launched in 1567. There were 400,000 tickets, with a top prize of the equivalent of about £17,500 in cash and lesser prizes in the form of goods worth the equivalent of about £7500 altogether.
All over 16th-century Europe private and public lotteries soon got a strong grip on the people. The lottery fever raged so strongly in Italy that in 1590 Pope Gregory XIV ordered the excommunication of anyone who bet on the election of a new pope or on the duration of the conclave (such bets usually taking the form of pools). At the instigation of Louis XII of France (who was also duke of Milan), tickets were sold for a lottery to be held on the date of the completion of Milan cathedral (which had been begun in 1386). Half a million tickets were sold but no one drew a prize: The cathedral wasn’t completed in Louis’s lifetime-or, indeed, anyone else’s in that century and the ticket holders were given their money back.
In the 1900’s there was soon there was at least one lottery office in every Italian town. Each office was under the control of a manager who ran it as an individual business, and who was responsible for all running expenses. He made a weekly return to the ministry’s General Inspectorate, which controlled all the legal forms of gambling in Italy, including casinos, football pools, small raffles, and games organized for charity.
In each of Italy’s 2200 registered lottery offices a draw was held weekly. Tickets bearing the numbers one to 90 were put in an urn and five numbers are drawn by the manager. There were several different kinds of forecast that a ticket-holder could try to make : He may try to predict any one of the five drawn numbers (which is called “simple extraction”) ; the order in which any one of the five numbers is drawn (“specified extraction”) ; any two of the five numbers (“ambo”) ; any three (“terno”) ; any four (“quaterna”) ; or all five (“cinquina”). In simple extraction the chances of winning are one in 18, in specified extraction one in 90, in ambo one in 400, in terno one in 11,748, in quaterna one in 511,038, and in cinquina one in 43,949,268. The prizes for simple extraction were 101 times the stake, for specified extraction 522 times the stake, for ambo 250 times the stake, for terno 4250 times the stake, for quaterna 80,000 times the stake, and for cinquina 1,000,000 times the stake. Anyone could buy as many tickets and make as many different forecasts as desired. In most towns the price of a ticket was one lira (about one sixth of one cent)-such a tiny sum of money that even the poorest investors bought 100 tickets at a time.
France, too, has its own state-controlled lottery (the Loterie Nationals) with weekly draws as well as special draws at Easter (tranche de Paques), the government’s summer vacation (tranche de vacances), Christmas (tranche de Noel), and various arbitrarily chosen occasions (known as tranche de la double chance) when the prizes are increased enormously.
In Britain, lotteries had a rough passage. “Lotteries exist to the utter ruin and impoverishment of many families, and to the reproach of the English laws and government,” says a law prohibiting lotteries that appeared in 1700, toward the end of the reign of William III-who had himself been fighting his Augsburg battles on the income from a lottery. Throughout the succeeding centuries, different British governments had different ideas about lotteries, some allowing them, some outlawing them. The present law permits a state lottery and such allied kinds of gambling as football pools and bingo.
Britain’s traditional government-run lottery (introduced in 1956) is totally unlike the various state lotteries in Europe. It is commonly called “Premium Bonds,” and is in effect a form of investing money in the state. The bonds themselves can still be bought at post offices and banks. Three months after their purchase, bonds become eligible for the monthly draw: Bond numbers are selected by an electronic machine known as “Ernie” (Electronic Random Number Indicator Equipment) and tax-free prizes are won by the holders of drawn numbers. A bond carries interest, which (instead of accruing to the bond holder) goes into a pool that provides the prize money. Unlike lottery tickets, bonds are not excluded after a single drawing : They go back into the draw again and again unless they are prize winners or are sold back to the state for their face value. So in fact Premium Bonds are not a full-fledged gamble. All that the holder stands to lose is the interest his money could be earning if invested elsewhere.
A national lottery was set up in the UK in 1994 and has proved phenomenally successful ever since. At first there was just one multi million pound draw per week and now there are several. Aside from the representative state-sponsored lotteries that I have looked at, this form of national gamble flourishes in such countries as Australia, Spain, Japan, Brazil, Greece, Israel, and in many more. Apparently these governments know a good thing (in economic terms) when they see one.
Proliferation of private lotteries of every kind (shipboard pools on the time taken for an Atlantic crossing, “door prizes” given away on admission tickets in American dance halls, raffles in clubs with prizes ranging from cars to chickens) and it soon becomes very clear that all the world loves a lottery.
The Irish Hospitals Sweepstakes, which was disbanded in 1987 was organized by a private company, Hospitals Trust Ltd., and has been held three times a year since 1930 (the year when the government of the Republic of Eire passed an act legalizing a lottery for the benefit of Irish hospitals). The Sweep is drawn three times in connection with three horse races-England’s Grand National and Cambridgeshire, and since 1962 the Irish Sweeps Derby. (Before 1962 the third race was the English Derby.)
The drawing of the lottery at the Hospitals Trust headquarters in Dublin was carried out under close supervision by the government and police. Several days before the relevant race was due to be run, all the ticket counterfoils (which were until this time held in sealed safe deposits under armed guard) were put in wind machines that blew them around continually for three days. Thus there would be no question of inadequate shuffling. Then, on the day of the draw (which took place in public), all the counterfoils were put in a long drum with eight rows of six holes in its circumference and the drum was revolved slowly to mix the counterfoils thoroughly.
A team of pretty nurses lined up beside the holes. As each nurse drew a numbered counterfoil from the drum, a second simultaneously drew a slip from a smaller glass drum. On these last slips were written the names of the horses. Both the number of the counterfoil and the name of the horse were announced, and the counterfoil and slip were then scrutinized by the director of the draw. The first, second, and third prizewinners are naturally decided by the horses; but everyone who drew a horse got a prize whether the horse was placed (i.e., finishes among the winners) or not, and there were in addition some 200 consolation prizes.
For much of the 1900’s, lotteries were illegal in the US, however illegal ‘numbers games’ known variously as the numbers racket, the policy game, bolita, mutuel numbers or negro numbers were popular through to the late 1960’s. Players of the numbers game gambled by attempting to predict some apparently unpredictable number. This used to be the final three digits of the daily balance figures of a city’s stock exchange; but upon occasion it was one of the payoff prices at a specific race track. The numbers game had its beginnings in Harlem in the early 1900s. At the time it was a small-scale gambling game that usually involved a simple prediction of the numbers in the final totals of the Cincinnati clearing house.
Tickets could be bought for as little as 10 cents and the prize for an all-correct forecast was never more than $300. But this harmless picture was soon to change. When Prohibition was repealed in 1932, the big-time racketeers who had made fortunes bootlegging liquor suddenly had their incomes cut off. So they looked around for a new field of action; and their attention turned to Harlem and the numbers game. Within a very short time the game was turned from a poor man’s gamble into a nation-wide racket of immense magnitude. And the man mainly responsible for this transformation was a top New York gangster named Dutch Schultz.
At the head of a gang of toughs and killers, Schultz had become one of the richest “beer barons” of the Prohibition years. Now he sensed a new gold mine. He and his gunmen invaded Harlem, took over the numbers game, and expanded its organization throughout the city. Numbers tickets were soon on sale almost everywhere ; and Schultz’s men were always on hand to see that people bought. By 1933 a would-be player could find about a dozen different numbers game depots operating on practically every street in Harlem, and the game was quickly spreading to other districts and cities.
Schultz awarded prizes for the lottery at his own discretion. Very often winners weren’t paid at all, and dissatisfied customers were left to argue with his henchmen.
If this approach caused business to begin to fall off in certain districts, Schultz would award some prizes. (It was at this period that the game became known as “the numbers racket.”) But obviously an explosive situation of this kind couldn’t last for ever, and Schultz’s reign ended in typical gangster fashion when an unknown gunman shot him down in October 1935.But the numbers game continued to flourish. Other big gang leaders took over control and there was considerable gang warfare that only settled down when each city was divided into sections, each gang controlling a particular section.
Naturally an elaborate and well co-ordinated organization was needed to run an underground activity on the scale of the numbers game. Although “controllers” had their own favorite methods of operating, the pattern was generally this: Books of numbered tickets were distributed to agents by an intermediary known as a “runner”; a second runner collects the money from the agent ; a third collects the receipts or “money slips.” Each runner works for a different controller, and each controller operates from a different office or “bank.” The operation is carried out in three separate stages in order to confuse the police, who could not make a conviction unless they obtained both the money and the slips: Money alone was not considered proof enough. From time to time, of course, the operators would slip up.
In July 1960, for example, the New Jersey police raided a private home and discovered $281,283 in cash, together with number slips, tapes, and adding machines-all the evidence they needed. In spite of the law, then, America has always been just as lottery-conscious as any other country. And, in the U.S.A. as elsewhere, the lottery principle is sometimes put to some strange uses. The American author Roul Tunley, in his book Kids, Crime, and Chaos, writes :”In one of Philadelphia’s better suburbs, a group of well-to-do youngsters developed an ingenious twist : a car-stealing lottery. The game was played as follows : Each day the kids in the group stole a certain number of automobiles, after each youngster had kicked in a certain amount of money for the `privilege’ of doing so. . . . When the police announced over the radio the license numbers of the stolen cars, the kid who had stolen the car that was mentioned first took the day’s pool.”
National Lotteries are now huge business with most countries running some form of state lottery with prize pools often into tens or hundreds of millions. The numbers game is still going strong.