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History of Lottery in America

Lotteries are not a modern, or American, invention. Scholars disagree on the origin of lotteries, but forms of lotteries date back to the time of Caesar, before Christ. There are references to lotteries in the bible. From 100 B.C. through the 17th century, China and European countries used lotteries to finance defense (like the Great Wall in China); fund armies; build chapels, almshouses, canals and port facilities; and to replenish royal treasuries.

In America, Lotteries served an important function in the early development of the country through the Civil War. The first permanent English colony in America, Jamestown, was funded by a lottery started in London by James the First. Many of America's founding fathers played and sponsored lotteries. Benjamin Franklin used lotteries to finance cannons for the Revolutionary War. George Washington operated a lottery to fund construction of the Mountain Road that opened westward expansion from Virginia. John Hancock operated a lottery to rebuild historic Faneuil Hall.

In the United States, lotteries were most active during the period following the adoption of the Constitution and before the establishment of an effective means of local taxation. Prior to 1790, America had only three incorporated banks; thus, lotteries served as established sources of public and private financing.

From 1790 until the lottery prohibition movement succeeded, Lotteries established and funded numerous civic improvements and educational institutions. Fifty colleges, 300 schools and 200 churches were erected with Lottery proceeds. These include some of our most prestigious educational institutions, such as Harvard, Yale, Princeton and Columbia. Between 1790 and 1860, 24 of the 33 states financed hospitals, orphanages, libraries, courthouses, and jails through lotteries.

Between 1820 and 1878, corruption in privately operated lotteries became rampant. Governments found themselves unable to regulate these lotteries and began lottery prohibition. By 1878, all states except Louisiana prohibited lotteries, either by statute or constitutional provision. In 1905, the United States Supreme Court reaffirmed the states' authority to control gambling. For the next 60 years, no state was directly involved in the operation of a gaming enterprise, and lotteries were prohibited.

In 1930, the Irish Sweepstakes was launched with great success in America because of the abolition of lotteries. In 1964, New Hampshire created a state lottery, the first legal American lottery in this century. Within several years, New Hampshire was followed by New York and New Jersey. In 1971, nationwide lottery sales surpassed $100 million for the first time.

On November 8, 1988 Indiana voters approved a lottery referendum by a strong majority, 62 percent. On May 3, 1989, the Indiana General Assembly ratified the Lottery Act and, a week later, Governor Evan Bayh signed the Lottery Act into law. In June, Jack Crawford became the first Lottery Director. The Lottery Commission was appointed a month later.

Three months after the creation of the first Commission, the Hoosier Lottery was in full operation. On October 13, 1989, instant, or scratch-off, ticket sales began at 12:10 p.m. On the first day alone, 8.19 million tickets were sold. By the following week, first week sales exceeded $21.8 million.

On October 28, 1989, the Hoosier Millionaire show debuted on WTTV-4 in Indianapolis and on its 10 station network. By mid-November, first month sales exceeded $61 million. The Lottery immediately repaid the state of Indiana more than $6 million in startup costs, plus interest. Within another three weeks ticket sales reached $100 million.

On March 15, 1990, Governor Bayh accepted $73 million from the Hoosier Lottery for tax relief.

April 30, 1990, the Hoosier Lottery began its first on-line game, Lotto Cash. On May 5, The first Lotto Cash drawing took place. One month later, Kurt and Teresa Voskuhl won $6 million for the first Lotto Cash jackpot. In July of that year, the Lottery introduced Daily 3 and Daily 4 games. August saw the unveiling of the Dream Machine, the Lottery's "mobile ambassador," a bright red Hoosier Lottery bus that travels around the state participating in special Lottery events. In October, Indiana joined the Lotto*America game (which later became Powerball).

By March 1991, the Hoosier Lottery ranked sixth in instant ticket sales among the 33 state lotteries. The Lottery's game show, the Hoosier Millionaire, gave away more money in prizes than any other game show in the country. By the end of 1991, the Hoosier Lottery topped $1 billion in sales.

In April 1992, Lotto America changed to the Powerball game. Indiana led the United States in Powerball sales after two weeks. Indiana resident, Bert Morlan, became the first Powerball winner, beating players in 15 participating states. The Lottery reached its 99th and 100th millionaires in the Lotto Cash drawing. The first bar-coded Scratch-Off Tickets, Cash Crop, Draw Poker and 3 Times Lucky, began. In December, entry onto the Hoosier Millionaire game show was changed: winning entries were now generated on every 50th dollar of sales, instead of every 50th transaction.

In January 1993, Nelson Oles pulled his own entry ticket in the drawing, and made a repeat appearance on the Hoosier Millionaire show. He was the third repeat contestant. The Hoosier Lottery introduced its fifth on-line game, Lucky 5.

In February 1994, the Hoosier Bingo instant game began. In September, Hoosier Lotto replaced Lotto Cash. Hoosier Lotto was designed to have more winners and bigger jackpots, and it offered the only "match two of six" prize in a pick-six game in North America. The game's first drawing, on September 24th produced 112 times more winners than the final Lotto Cash drawing. On September 19-24, the Hoosier Lottery hosted the North American Association of State and Provincial Lotteries (NASPL) convention in Indianapolis. The economic impact of the conference was estimated at more than $600,000.

In October 1994, the Hoosier Lottery sold its first $5 instant ticket to commemorate the Lottery's fifth birthday. Other birthday celebrations included transfers to the state of $708 million, ticket sales totaling over $2.4 billion and player prize payouts of over $1.3 billion since the Hoosier Lottery's inception. In fiscal year 1994, the Hoosier Lottery averaged 1,000 major winners ($500 or more) every month.

In March 1995, Indiana led all Powerball states with a $9.1 million winner and seven $100,000 winners in the March 4th drawing. By April, transfers to the state topped $800 million. In May, the Lottery launched its informational campaign designed to let Hoosiers know that more than $100 million in Lottery profits would be used in 1996 to reduce license plate excise taxes. In June, the Lottery recognized a Hoosier entertainment tradition by inaugurating Instant Euchre, the world's first lottery game to use suit and trump.

In August 1995, the Lucky 5 game was expanded from two to five nights per week. The Hoosier Lotto now offered a 25-year annuity as a prize payment option. In November, the Hoosier Lottery awarded a new media contract to WNDY-TV in Indianapolis to broadcast the Hoosier Millionaire show. In December, Indiana had the first quintuple $100,000 Powerball ticket sold in the 21 participating states.

In February 1996, the Hoosier Lottery unveiled a fresh look for the Hoosier Millionaire game show. Later in February, the Lottery held the first Lucky 5 second-chance drawing, allowing players to win $70,000 in one drawing and $500 in prize drawings held later in March. In April, the Hoosier Lottery presented Lucky For Life 1, the first instant ticket that offered a prize for life ($1000 per month for the winner's lifetime). In August, Frederick Leo O'Connor of Indianapolis hit the Lucky 5 jackpot four times and received $200,000. Lucky 5 was expanded again, to seven nights a week.

In March 1997, the Hoosier Lottery introduced the Tax Free Million instant game offering a top prized of $1 million with the federal taxes paid for by the Hoosier Lottery (The state of Indiana does not impose taxes on Hoosier Lottery winnings.) The Hoosier Lottery launched its first Web page on the Internet at www.hoosierlottery.com. In June, the Lottery introduced a new multi-state game, Daily Millions. In November, the multi-state Powerball game made changes to allow a choice between cash or annuity options, and larger prizes in lower levels.

In February 1998, the Hoosier Lotto game was expanded from one drawing on Saturday to two drawings conducted on both Wednesday and Saturday. The first $10 instant ticket, 2 Million In Cash, went on sale in late February. In March, the Multi-State Lottery dropped the Daily Millions game and began the Cash4Life game, the first multi-state game to offer a lifetime prize. In August, a Powerball ticket sold in Richmond, Indiana to a group of co-workers pooling their money was validated for $295.7 million, the largest North American jackpot.

In June 1999, David and Elaine Pearson claimed the largest Hoosier Lotto jackpot ever, $42 million. They decided to accept the cash option of $26.2 million, and took home $16.3 million after Federal taxes were deducted. In August, the Hoosier Lotto jackpot was split by three winning tickets for the first time. William Hutchison of LaPorte, Robert Hagberg of Ligonier and Dale Gaddy and Olav Haug of Indianapolis split the $10.5 million prize. In October, WB4 is selected as the new television station for the Hoosier Millionaireshow and the nightly Lottery drawings. WB4 began Lottery productions in early 2000. On October 13, 1999, the Hoosier Lottery celebrated its 10th anniversary with gala events held across Indiana.