The History of the Lottery


The first recorded lotteries offered tickets that contained money prizes. Low Countries towns held public lotteries to raise money for the poor and for town fortifications. Some sources indicate that the lottery was actually even older than this; a record from L’Ecluse, France, dated 9 May 1445, mentions raising money for walls and fortifications through a lottery of 4,304 tickets worth florins. In today’s currency, that would be approximately US$170,000.

It’s a discrete distribution of probability on a set of states of nature

The probability of an event, which has no fixed outcome, varying with time, is called a discrete random variable. Different types of random variables have different properties, but all of them exhibit a probability distribution. For example, an independent Yes/No experiment may yield an expected payoff of $500 in 10% of the time, but if the probability of success is 50%, the average payoff is $50. In other words, a discrete random variable does not have a normal distribution, as it only has two possible values.

It’s a form of hidden tax

The lottery is a form of hidden tax, as proceeds from lotteries are not considered tax revenue by the Census Bureau. Instead, these funds are built into the price of a lottery ticket. As such, this tax is a form of hidden tax because it is a source of government revenue that is not readily apparent to the public. As such, lottery gaming taxes are made without people realizing it, but the government makes money off of them without telling us.