Centuries of good and evil: The lottery turns 456 years old

Jackpot: $2.5 million. That’s roughly how much, in today’s dollars, the winner of England’s first-recorded state lottery won on Jan. 11, 1569.Not bad – though about 100 times less than Saturday’s estimated Powerball pot of $263 million.At the time, Queen Elizabeth was searching for a way to raise funds to repair the country’s battered ports and harbors without needing to levy a costly tax on English citizens.Lotteries were hardly a new concept – the idea of selling chances to win prizes was said to date back to ancient China. But Elizabeth was among the first known leaders to create a government-charted sweepstakes aimed at collecting funds for public projects.Tickets were sold throughout London and the drawing was held in front of St. Paul’s Cathedral in the city, where everyone could watch. Sound familiar?Now, 456 years later, countries across the world employ similar national lottery systems to generate revenue for everything from public education to environmental conservation efforts and infrastructure repairs.In the U.S. alone, 45 states along with the District of Columbia, Puerto Rico and the U.S. Virgin Islands run lotteries. Mega Millions and Powerball tickets are sold in each of those places, and their weekly drawings are televised for all to watch. About half of Americans buy a lottery ticket every year, according to a 2016 Gallup survey.Yet, experts have questioned whether lotteries provide as much benefit to governments as they were once believed to. While money from lotteries often goes toward public programs, some argue that they act as a tax on low-income groups who are more likely to spend their money trying to strike it rich on lottery tickets. They question whether the government’s earnings from the games outweigh negative economic impacts on lower income groups who are more likely to wager their earnings.In honor of its birthday, here’s a look at the ways lottery’s have influenced society – for better and worse.As old as AmericaIn 1612, King James in England granted a request for a lottery to be held by the Virginia Company to raise funds for their new North American settlement: Jamestown.Since then, lotteries have been ingrained in U.S. history – with mixed success.Victor Matheson, a professor of economics at the College of the Holy Cross in Massachusetts, noted that lotteries helped build countless landmarks in colonial America.John Handcock arranged one to fund the construction of Faneuil Hall in Boston and universities including Harvard and Yale used funds from lotteries to erect their campuses. The Continental Congress even enacted a national lottery to help finance the Revolutionary War. Former President Thomas Jefferson called them “indispensable to the existence of man.”“The lottery has been totally effective at building stuff, because people have been willing to purchase these lottery tickets,” Matheson said.But in the mid-1800s sentiment around lotteries had begun to nosedive in the U.S. as concerns rose about their moral turpitude and by the end of the century, Congress outlawed the shipment of lottery tickets across state lines, ending most sales.It wasn’t until 1964, that New Hampshire helped resurrect the lotto in America. At the time, New Hampshire was one of just a few states without a sales or income tax. In need of a way to raise funds, but afraid of the political consequences of implementing new taxes, state lawmakers opted to experiment with a lottery.Countless states followed in the ensuing decades.Jonathan Cohen, author of the book “For a Dollar and a Dream: State Lotteries in Modern America,” said lawmakers in the past viewed lotteries as a way of replacing taxes. They had a “jackpot mentality” not dissimilar to the mindset of those who gambled on the games, Cohen told USA TODAY.“When it comes to the lottery money, states went all in with this hope that it was going to magically solve all their state's financial problems in the same way that lottery players hope that a jackpot is going to,” Cohen argued.Today, states use lottery money for a variety of programs. Missouri, Idaho, Oregon and Virginia allocate lottery revenue to public education programs. Other states including Georgia, Arkansas and South Carolina fund college merit scholarships with the funds. Many states allot the lottery money to their general revenue funds to be used as discretionary spending.A tax on the poor?In some ways, Matheson argued that lotteries have proved to be an effective way of raising government revenue. Unlike a sales tax on necessary goods like food, gas and clothing, he said lottery tickets act as a “voluntary tax.”  However, they’re also often bought by people in the lowest income brackets.A 2022 nationwide investigation by the Howard Center for Investigative Journalism at the University of Maryland found that most stores selling lottery tickets are disproportionately located in low-income neighborhoods.“Lotteries are in the business selling hope, right? And selling dreams. And of course, those dreams are different if you're poor than if you're rich." Matheson said.“If I make 10 times as much money, I probably actually buy fewer lottery tickets,” he added. “That means that tax burden for the lottery comes disproportionately from the pockets of people who are already disadvantaged.”He, Cohen and other scholars have argued that states like Georgia, which uses lottery money to fund college merit scholarships, are taking money from the poor and giving to the middle and upper class.“You have the poor subsidizing education of people who are our state's future, doctors and lawyers and CEOs? That that doesn't seem quite right in some ways,” Matheson said.The Georgia lottery counters that its scholarship has allowed more than 2.1 million students to attend state universities and technical colleges since it was founded.Matheson and others have suggested that income taxes – though not voluntary – are better ways of raising government funds.Lottery proceeds make up roughly 2% of all state taxes revenue, according to a 2022 report from the research organization The Motley Fool. And Cohen has suggested that the lottery is less efficient than other forms of taxes at raising revenue because states take a smaller stake of every lottery dollar, compared to what they take out of taxes."They're effective in that, yes, they do raise money for public goods," Cohen said. But, he said he believes that the lottery is are "outdated, "unnecessary" and is "doing more harm than good in American society."Still, many of those who buy and sell lottery tickets see them as a symbol of hope.Henok Gaze, who works at a 4-foot by 4-foot convenience store right off a metro stop in Arlington, Virginia, said he sells more lottery tickets than anything. Most people, he said, have a spark of excitement when they purchase a Powerball or Mega Millions ticket."If you're lucky, you'll win," Gaze said. "You should control yourself and buy one or two tickets a day, but it's fun to play."He's never sold a winning ticket worth hundreds of thousands of dollars, he said. But maybe one day.