Lotteries as Public Funding

In it to win it? Source: Pixabay For the average person, the lottery represents a chance to win an incredible amount of money with the purchase of just a single ticket. Granted, the chances of actually winning are so low that it is more likely that you will be struck by lightning, or flattened by a piece of space junk than land all the winning numbers. While that may be true, someone has to win, and national lotteries play more of a role than just dishing out cash to the lucky winner. While the majority of the ticket sales go to the hefty payouts, there is a significant amount of cash that gets used for other purposes. Most people don’t realise it, but national lotteries are responsible for the support of hundreds of government sponsored organisations, charities and publicly funded start-ups. If you want to get an idea of where the funds are being distributed, simply head to the website of your national lottery and you will find a long list of non-profit organisations, sporting bodies, cultural bodies, charities, educational institutions, recreational clubs and public benefit trusts that all rely on funds from the lottery.

The Allocation of Funds

When we purchase a lottery ticket, whether it be at a supermarket or online, what we are essentially doing is helping to build schools, churches, playgrounds, sports fields, or feed the hungry, shelter the poor, provide medical support for the sick and create a stronger economy. At the same time, there is a very, very small chance of becoming an instant millionaire. Unlike slots, where the chances of winning are far greater, the lottery can be viewed as something players can do to contribute to the economy or well-being of those around them – the fact that there may be a massive payout at the end is almost inconsequential - but well worth playing for. Lotteries and social funding Source: Pixabay

The Origins of Lotteries

The idea of using lotteries for public funding is not a new one. In fact, the first accounts of a lottery system date back 3000 years. While the exact details remain unclear, it is believed that a primitive form of Keno was developed in China during the Han Dynasty in order to raise funds for the war effort. At the time, the Chinese ruler Cheung Leung was involved in a long war which was seriously depleting the city’s funds. Additional funds had to be brought in from the public, but the idea of taxation didn’t sit well. An old lottery advert Source: Pixabay It was then that Leung got the idea to create a city-wide lottery game similar to Keno in which players could win a massive payout if they guessed the right number/word combination. The lottery system worked so well that the city had plenty funds to finish the war effort and continue to fortify the economy. It is believed that a public lottery system was also used to fund the building of the Great Wall of China.

Italy and the UK

The first documented public lottery came about in Italy in the mid-15th century. Again, the lottery was organised as a means to support a war effort. Later on, King Frances I of France was so impressed by the system that he decided to organise a lottery in his own kingdom to help support state finances. In the UK, the first recorded lottery was commissioned by Queen Elizabeth the first in 1566. The lottery was implemented to raise funds for the working capital and to strengthen the realm. In 1612, King James granted the Virginia Company of London the right to hold a lottery in order to establish a permanent settlement in the colony of Jamestown Virginia.

Lotteries in the US

Lotteries played a major role in building early America with over 200 lotteries sanctioned between 1744 and 1746. They played a major role in financing colleges, building roads, bridges, libraries and major universities. It was lottery money that was used to create the foundations of Princeton and Columbia University. In a famous example of lottery funds, Benjamin Franklin organised a lottery to raise money for the purchase of a large cannon for the defence of Philadelphia. Lotteries seem to be here to stay, and the benefits they offer in terms of public funding have essentially helped built society and change the world we know it, one ticket at a time.

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