The Evolution of the Official Lottery

Across America, state lotteries are booming. Americans spend an estimated $100 billion on tickets each year. But lottery winnings aren’t always claimed—last fiscal year, for example, $78 million in prizes from scratch and draw games went unclaimed.

This is partly because people often forget to check their tickets. But it also has to do with moral, religious and social distaste for gambling. In the 1800s, the same moral sensibilities that eventually led to alcohol prohibition started turning against lotteries. “There were a lot of crooked lottery organizers who just took the money and didn’t award any prizes,” Matheson says.

The first official lotteries to sell tickets with prize money in the form of cash were in the Low Countries in the 15th century, where towns used them to build town fortifications and help the poor. By the 17th century, it was a common practice in England, where King James I chartered the country’s first state lottery to raise funds for ships that would sail to his new colony in Virginia. Tickets cost ten shillings, and winners received a get-out-of-jail-free card—literally: the winning ticket could be used as proof that you weren’t guilty of crimes such as murder, piracy or treason.

Now, in addition to checking their tickets, lottery winners need to provide a full name and address, birth date, Social Security number or other identification, and bank account information. They must also sign a prize claim form in the presence of a notary public. If they are using a trust, they must provide the names and Social Security numbers of all trustees and beneficiaries.