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The First Adventurers
The casting of lots to determine the outcome of events is as old as history. Making selections by lots was mentioned in a positive way in the Old Testament (Proverbs 18:18): 'The lot puts an end to disputes and decides against powerful contenders.' And in the New Testament when the Apostles were trying to decide what to do with the clothes of Jesus, it was John who suggested: 'Let us draw lots for it.' In ancient India the drawing of lots from a vessel was used to determine legal guilt or innocence. The Teutonic tribes drew lots to decide whether to take part in a battle and who should lead the tribe.
But it was the Romans who came closest to modern lottery practice. As a form of public entertainment Nero and Augustus used random draws to give away everything from slaves to villas. Augustus is also reported by Suetonius to have required his dinner guests to buy lots which all cost the same, in order to win items of very unequal value the same principle underlying the lotteries that developed in Europe in the 15th and 16th centuries.
The earliest European records show that holding lotteries to raise money for public purposes began in the Low Countries in the 15th century, when the Duke of Burgundy gave permission for the first municipal lotteries to be held in dries under his control, such as Bruges, Ghent and Utrecht. The archives in Bruges record that a lottery held in August 1446 was won by the wife of a Venetian, Anthony Mousque. A list of Bruges 'adventurers', as those taking part in theselotteries were called, included the names of Richard Buerch, a London merchant, and David Blaber, a barrel-maker from Aberdeen. Just as today, money was handed over for a ticket, lots were drawn, prizes were distributed and the profits, if any, were used to fund public projects for which it was difficult to raise money in any other way. In this instance, money was being raised to strengthen the fortifications of towns and cities in the region.
In 1522 in Venice a second-hand clothes merchant called Geronimo Bambarara used a lottery-style draw to get rid of surplus goods everything from parcels of silk and wool to amber beads, horses and even a cat. From 1530 a regular Lotto draw was being held in Florence. By 1576 the Italians had devised a sophisticated system of drawing numbered balls from an urn. Around the same time similar balls were used by the Doge of Genoa to choose members of the ruling college, and before long side bets were being placed on the outcome.
The first large-scale lottery in Britain, almost certainly a concept imported from the Low Countries, was held in the reign of Elizabeth I. This English lottery, approved by Elizabeth but actually organized by the Secretary of State Sir William Cecil, seems to have been on a much grander scale than the lotteries that had sprung up in the Low Countries a century earlier. The Royal Proclamation issued in August 1567 showed just how ambitious the Queen's Lottery was. The 400,000 tickets were to be sold at 10 shillings each the modern equivalent £100, although wages then were also a fraction of what they are now. There was to be a prize fund totalling £60,000. Most of the 370,000 unlucky adventurers who did not win a prize would receive half a crown, or a ,quarter of their original stake, back. The profits and expenses were expected to total £100,000.
All municipalities were urged to take part, as were the livery companies of the City of London. Couriers were also despatched to Ireland to spread the lottery message. The first prize was set at £5,000, £3,000 of which would be in 'ready money' and the rest in gold and silver plate valued by independent goldsmiths, tapestry and 'certain sorts of good linen cloth'. In addition there were special prizes for the first three numbers drawn. A seven-day amnesty was announced to allow criminals, apart from those accused of murder, treason or piracy, to come into the larger towns to buy their lottery tickets. Foreigners were promised that they would only have to pay half the normal export duties on any winnings. Although there were numbers on each ticket many of the players also wrote a short verse or 'poesy' on the ticket counterfoils, usually expressing the purchaser's ardent desire to win.
Hastings on the south coast of England, which had ticket number 28,143, expressed its wishes very clearly.
From Hastings we come,
God send us good speed
Never a poor fisher town in England,
Of ye great lot hath more need.
Most players attached their names to their little verses expressing hopes of the success that might transform their fortunes. As Sibbel Cleyton, holding ticket number 51,832; put it:
I am a pore maiden and faine would marry,
And the lacke of goods is the cause that I tarry.
The first attempt at running a national lottery in England was not a spectacular success. The high cost of the tickets was a drawback, but there may also have been suspicion about the introduction of such a foreign invention and some may have been worried about whether they would ever get their prizes. An obvious additional disincentive was the fact that the tickets were on sale for eight months following the August 1567 proclamation, but the draw was only due to start on 25 June 1568. There must have been some doubt in the public mind about exactly when the draw would be held, because in September 1567 the Lord Mayor of London felt the need to issue a proclamation stating that the draw would not be postponed beyond June without 'very greate and urgent cause'. Inevitably there turned out to be many urgent causes, most involving the fact that the populace could not be persuaded to buy anything like the 400,000 tickets on sale, and the draw was postponed several times by Royal proclamation to give more time to drum up support.
In the end Queen Elizabeth admitted failure and blamed 'some mistrust and doubtful interpretation of the proceedings' for the fact that the planned sum of money could not be raised. After more than a year's effort only 34,000 tickets had been sold instead of the 400,000 planned, despite considerable arm-twisting of local dignitaries such as justices of the peace and sheriffs by 20 specially appointed Surveyors of the Lottery to try to persuade them to buy tickets.
It was decided that the draw should still go ahead but there was considerable doubt over how it should be done. The answer came from a Frenchman, Estienne Perrot, in a letter to Sir William in 1569. All the 34,000 organizations and individuals who had bought tickets would be given a total of 12 chances to win the prizes instead of one, as if all 400,000 tickets had been sold. Although the number of prizes would remain the same, their value was cut to one-twelfth of the £60,000 promised. The final Royal Proclamation admitted that the winner of the greatest lot would get only four hundred and sixteen pounds, thirteen shillings and fourpence.
The draw, or 'reading' as it was called, finally began early in 1569. In one lottery wheel had been placed the 400,000 counterfoils representing the hopes of those taking part, while the other contained 29,505 prize tickets and no fewer than 370,495 blanks. 'A great Lotteria being holden in Paules (St Pauls) Churchyard, at the west doore, was begun to be drawne the 11 of Janurie, & continued day and night till the sixth of May, where in the said drawing was fully ended,' reported John Stow, a tailor with an interest in history, in his Annals of England.
The process of matching the two sets of tickets took such a long time because each had to be manually drawn from the two 'wheels of fortune' before Queen Elizabeth's 'verie rich Lotterie Generall' was completed. It was not an auspicious beginning for the lottery as a money-raising device because no more than a few thousand pounds can have been raised for the Cinque ports, the main beneficiary. But over the next 300 years lotteries entered the British way of life. Many hundreds were held, large and small, private and state-run, legal and illegal. Controversy and scandal were never far away, as were frauds, suicides and hangings. In the 17th century the lotteries were mainly private and were a form of monopoly to be granted by the King or the King-in-Council. Royal permission was given for private lotteries designed to try to get the maximum price for everything from surplus armour and an aristocrat's expensive diamond to a bookseller's rare volumes.
Lotteries were used to raise money to ransom English slaves held in Tunis, Algiers or in the Turkish galleys and even contributed much needed financial help for the colony of Virginia at one of the most vulnerable moments in its early history. In fact, a whole series of lotteries was held by the Virginia Company on behalf of the English plantation in Virginia, with varying degrees of success. They began in 1612 when a 'liberall Lottery which contained five thousand pounds in prizes certayne' was drawn in a specially built house close to the west end of the original St Paul's Cathedral.
The Spanish, who were watching the English efforts to establish colonies in America very closely, were contemptuous of the method of funding Virginia. The Spanish ambassador to England, Don Pedro de Zuniga, the Marquis of Flores, wrote to his king in code referring to the lottery as a 'generall kynde of begging' and predicting that a colony dependent on uncertain injections of lottery cash every year or so would collapse of its own volition. If it had been entirely dependent on lottery funds it might have done just that, for the Virginia lotteries were unpopular in the towns of England. In May 1621 King James suspended their operations because, he argued, they were causing more and more inconvenience 'to the hindrance of multitudes of our subjects'. The Virginia Company was dismayed by the suddenness of the decision and was left with expensive gold and silver plate on its hands which had been bought as lottery prizes. Defenders of the Virginia series of lotteries noted that the money raised had sent more than 800 people to the colony when they were most needed.
Before the Civil War in 1642 lotteries were reintroduced to raise money for ambitious projects such as building an aqueduct to bring fresh water to the heart of London the scheme never got off the ground and to invest in the development of the British fishing industry. After the Civil War Oliver Cromwell brought an abrupt end to lotteries even card-playing was declared illegal and they were only revived after the Restoration in 1660.
Within weeks of his return King Charles had received many requests for permission to set up private lotteries, usually under the guise of charity. The sudden surge of interest was not universally well received. The Mayor and sheriffs of Norwich wrote to King Charles to complain that the frequency of lotteries and puppet-shows were diverting the 'meaner sort' from their work. There were also widespread fears that lotteries set up to raise money for charity were designed more to enrich their organizers. The Royal Oak lottery, set up soon after the Restoration under royal grant to help both distressed cavaliers and the fishing industry, was widely criticized as a private money-making exercise.
Yet, according to two of England's finest diarists, John Evelyn and Samuel Pepys, some of the greatest in the land, including the King, the Queen Consort and the Queen Mother, were prepared to take part in lotteries and risk £10 by purchasing a ticket in Sir Arthur Slingsby's Lottery, which was drawn at the Banqueting House, Whitehall on 19 July 1664. Evelyn, who bought a ticket because he had a 'desperate debt', managed to win only a trifle and denounced Sir Arthur as 'a mere shark'. Pepys, who was toe careful with his money to take part, found it 'good sport' to watch those who had given £10 (the equivalent of £900 today) receive only bauble; such as pairs of lamps for their money quite apart from a gentlewoman, a Mrs Fish who drew the only blank. 'I did observe the King and Queenes did get but as poor lots as anyone else,' Pepys wrote. The wisest man, he observed, was a Mr Cholmley who insured most of those there against drawing the blank for 12d each. As Mrs Fish had not taken out insurance Mr Cholmley kept all his money, Pepys noted admiringly.
By the end of the 17th century governments increasingly saw lotteries as general money-raising devices and took over the power of authorizing them from the Crown. The first such lottery to be authorized by Parliament came in 1694. Known as the Million Lottery because it was designed to raise £1 million, it was organized by the Treasury to boost public funds during the War of the League of Augsburg against France. It was probably the first truly national lottery in Britain. The Million Lottery introduced a new concept that was much closer to buying a premium bond than the lotteries that were to follow. Purchasers of the 100,000 £10 tickets would all get annuities for 16 years which guaranteed a minimum profit of 60 per cent or a total of £6 in addition to their stake over the period. But 2,500 were dubbed 'fortunate tickets', attracting higher rates of interest with one ticket, the most fortunate of all, paying £1,000 a year. The lottery was, in effect, being used to borrow money at what the government saw as reasonable rates of interest. There would, however, soon be complaints that people had to wait too long for their annuities, and it took a further act of Parliament to ensure they received their money.
Apart from the Million Lottery, in the final decade of the 17th century newspapers were full of advertisements and blandishments for private lottery schemes that sounded too good to be true, and usually were. There were lotteries such as the Lady's Invention, which claimed to offer a top prize of £1,000 for a 6d ticket, with no blanks, which meant that everyone won some sort of prize. According to the General's Magazine the draw for a Penny Lottery, with £1,000 as the main prize, began at the Dorset Garden Theatre on 19 October 1698, and its fairness was said to have given 'universal content to all that were concerned'.
The growth in the number of private lotteries in the final years of the 17th century was matched by the level of controversy, particularly over the increasing number of unregulated or illegal lotteries. A petition from the justices of the peace and the Grand Jury of Middlesex was presented to Parliament in February 1699 complaining that 'evil-disposed persons' had for years been setting up lotteries for their own advantage and were cheating the unwary of large sums of money. In the same month the Lord Mayor and Council of London sent a similar petition to Parliament.
Such petitions made a political impact and a ban on lotteries became a real possibility, much to the disquiet of those who had won annuities in previous lotteries and who feared that they would never be, paid if lotteries were discontinued. Another unpopular aspect of official lotteries of the time was the fact that unsold tickets were often used as currency. The innkeepers of Middlesex, for example, who provided quarters for the Earl of Oxford's regiment of horse, complained about being paid in lottery tickets.
Such abuses fuelled the opposition to lotteries, which became so great that a bill for their suppression was put before the House of Commons and passed on 27 April 1699. It was agreed by the Lords without amendment. The Act accused lottery operators in London and in the main cities of the kingdom of having 'most unjustly and fraudulently got to themselves great sums of money from the children and servants of several gentlemen, waders and merchants and from all sorts of other unwary persons to the utter ruin and impoverishment of many'.
Between April and 29 December 1699, when the Act of Suppression came into effect, a large number of lotteries were organized to take advantage of the little time left. The wide range of get rich quick schemes on offer that year included the 'New Wheel of Fortune' offering £2,000 for 2d, 'Fortunatus or a Thousand Pounds for a Penny', and 'The Hopeful Adventure', drawn in the great room of the Swan Tavern in St Martin le Grand on 26 December. 'A Great Estate in Little Monies', however, had to hand all the subscriptions back after its offer of £1,000 a year for life for a half a crown ticket or £11,000 for a 25-shilling ticket failed to attract enough players.
A pattern was beginning to emerge. The government was distrustful of the social impact of lotteries, except when it wanted to use the device to raise money on its own account. Private lotteries were 'also tolerated for long periods, with private operators seeking permission from the Crown and often paying 'rent' for the privilege. When the scandals became too embarrassing and the abuses too flagrant, lotteries were suppressed for a time, at least officially. The gambling urge was so strong, however, that illegal lotteries were never wholly stamped out. In fact the 1699 Act suspended rather than suppressed, lotteries, which were to make a dramatic comeback and reach new heights of popularity and influence in the 18th century, particularly during the reign of George III.
In 1710 Queen Anne used the device to raise gross revenues of £1.5 million with the salve of 150,000 tickets at £10 each (£800 in modern money). Every ticket holder was entitled to an annuity for 32 years, so in effect the government was taking on long-term obligations in return for money that it could use immediately. Under the terms of the lottery the 146,250 people who drew blanks got 14 shillings a year and the lucky 3,750 prizewinners received anything from £5 a year to the top prize of £1,000 a year. The first and last tickets to come out of the draw, which began at the Guildhall in London on 10 November, attracted an annuity of £50 a year. Although the 1710 lottery was not particularly successful, Queen Anne held two lotteries the following year and a further two in 1712.
The motives of the players were well understood, and the draw was designed to create the maximum excitement. 'In a lottery where the hopes of good fortune is the chief allurement, the more scope and swing is given to the people's expectations and fancies the more certain you are to draw them in,' noted Lord Halifax after surveying the arrangements for one of the 1711 lotteries.
Throughout the 18th century the need for money overcame any wave of public sentiment against lotteries, and there was hardly a year when the government did not hold a state lottery. A typical example would see the government announce its intention of holding a lottery with 50,000 tickets where £500,000 would be distributed as prizes. The government would not sell shares, or tickets, in the lottery directly to the public. Instead the Chancellor of the Exchequer would invite bids from stockbrokers who would buy the lottery tickets from the government in effect underwriting the lottery and take the risk that they could sell the tickets on at a profit. Brokers, for example, might agree to pay £15 a ticket for a total of £750,000, giving the government a £250,000 profit after the £500,000 prize money had been deducted. The brokers were then allowed to sell the tickets for whatever they could get for them. Considerable mark-ups were involved as the tickets were subdivided into tiny stakes so that as many people as possible could afford to take part.
During the 18th century the growth in state lotteries was accompanied by renewed attempts to stamp out illegal operators. Fines on those caught were increased to £500 or a year in jail and there were also renewed prohibitions on importing tickets from overseas lotteries.
Lotteries were embedded not only in the political life, but also the social life of the times. They were discussed, in a very practical way, in the most respectable magazines of the day. The Gentleman's Magazine, for example, advised its readers not to buy lottery tickets too soon after they went on sale. By holding off, the players could put pressure on the jobbers who sold the tickets to reduce the prices of unsold tickets as the draw date loomed. The magazine also warned its readers of the sort of mathematical odds they could face in a typical lottery 34,999 to 1 against winning a £10,000 prize and 6 to 1 against winning £20 or any prize at all.
The contemporary controversy over lotteries was even joined by Adam Smith, author of the Wealth of Nations, who observed that it was an incontrovertible fact that the world never had seen 'nor never would see' a fair lottery.
Lotteries also found their way on to the London stage as a topic for comedy and satire. The musical comedy The Lottery was well received when it was first performed at the Drury Lane Theatre on New Year's Day 1732. The play, by Henry Fielding, the author of Tom Jones, took a sardonic view of the phenomenon from the moment of its opening song:
A Lottery is a Taxation
Upon all the Fools in Creation
And Heaven be prais'd
It is easily raised,
Credulity's always in Fashion:
For Folly's a FUND,
Will never lose ground,
While Fools are so rife in the Nation.
It was a play that used the lottery, and those who hoped to win its prizes, as a metaphor for chance and life itself. Who can doubt, Fielding argued, that the world is a lottery 'when born, we're put in, when dead we are drawn out'. Throughout the work, written when Fielding was only 25, the underlying obsession is with the danger of drawing a blank and the terrible truth that whether you are talking about money, women, lawyers, doctors or even plays, there are always 'ten blanks to a prize'.
Most 18th-century lotteries were simply seen as a form of taxation and a relatively painless way of relieving pressure on the Exchequer. Two lotteries, or series of lotteries, stand out mainly because we can still see, and use, their results today the Westminster Bridge lotteries and the British Museum lottery. No fewer than five lotteries were held between 1736 and 1741 to help to finance the building of a bridge across the Thames from 'the New Palace Yard in the city of Westminster to the opposite shore in the County of Surrey'. Until the 18th century the only way of travelling between Westminster and the other side of the river was by a ferry owned by the Archbishop of Canterbury a crossing still commemorated in the London street name Horseferry Road. The bridge, which took more than 11 years to build and cost £389,500, was finally opened in 1750.
The origins of the British Museum lie in an Act of Parliament passed three years later. It set up a lottery to purchase the library, and collection of Sir Hans Sloane for £20,000 and combine it with the manuscripts and library of Sir Robert Cotton. They would then be brought together in a new building which would provide 'one general repository for the better reception and more convenient use of the said collections'. Sir Hans, a distinguished physician whose patients included Pepys and Queen Anne, is regarded as the father of the British Museum, which for years housed his vast collection of fossils, minerals, zoological and anatomical specimens. As an indication of how respectable lotteries for good causes had become, the trustees of the British Museum lottery were no less a trio than the Archbishop of Canterbury, the Lord Chancellor and the Speaker of the House of Commons. The 100,000 tickets for the British Museum Lottery cost £3 each £1 down and £2 payable before the draw with a £10, top prize and special prizes for the first and last tickets drawn. Attempts were made to stop profiteering in the tickets by setting a limit of 20 on the number any individual could buy and ending the sale of tickets two days before the draw commenced.
Things did not go exactly as intended. There were massive breaches of the rules governing the lottery that ultimately led to a Parliamentary inquiry. Peter Leheup, one of the organizers, was accused of favouring friends by selling tickets in advance and enabling people to avoid the 20-ticket maximum ticket limit. One of his 'clients' was able to obtain 4,600 of the £1 paid tickets, which he sold on for £5,587. Leheup was prosecuted and fined £1,000. The lottery only raised £95,194.8s 2d, considerably less than exposed, because a large sum disappeared into the pockets of a swindler.
Although the rather cumbersome drawing methods remained largely unchanged, the lottery took many forms throughout the 18th century everything from straight prize draws to annuities in the form of government stock. In the case of the 1751 lottery the lucky players received, instead of cash, shares in the South Sea Company better known as the South Sea Bubble. Some of the state lotteries were good investments. But for the average participant, apart from the minority of winners, there was every chance of losing between 30 and 50 per cent of the capital 'invested'.
Throughout the century remarkable promotional campaigns were used to persuade people to take part in lotteries. Handbills were run off by the thousand and although the literary style may have changed the central theme has not. A handbill from the 1793 lottery, encapsulates the age-old emotional appeal and questionable logic of this form of gambling: 'Somebody must have a prize. Anybody may have a prize. Nobody can tell who will have a prize. And therefore, everybody is justified in trying for a prize. Thus hope animates their waking thoughts hope inspires their dreams Passions are corrected by the hope of a prize Tempers are sweetened by it. The fireside brightens when the prudent parent communicates to his wife and children that they have a chance for THIRTY THOUSAND POUNDS ...'
Considerable public ritual accompanied the official lottery draws. Before the draw the 'wheels' or 'boxes', as they were known, were pulled through the streets on sledges escorted by a detachment of the Life Guards. The procession started at the lottery offices in Whitehall and ended at the Guildhall, where the draws were held until 1802, when they moved to Cooper's Hall.
The social impact stretched far beyond the official draws themselves. In the streets it was impossible to escape the fervour as traders tried to cash in on the lottery by offering their customers a chance to win a prize in small private, illegal lotteries. There were lottery barbers where a threepenny shave also brought the chance of winning £10, and lottery eating houses where diners received with their sixpence worth of roast beef a ticket that could be worth sixty guineas. Buying everything from tobacco and hats to magazines and oysters brought with it the possibility of winning a sizeable: sum. And bets could also be placed on the chance of any particular number winning a prize in the state lotteries. This was obviously frowned on, because the government did not benefit, but legislation failed to stamp out the practice.
Although the annual net profit made by the state from lotteries rose from £150,000 in 1786 to £300,000 in 1792, by the later years of the 18th century there was a growing feeling that the overall price was too high that gambling, and lotteries in particular, were damaging not only individuals but also the fabric of society. The Times wrote that in order to participate in lotteries the wives of many industrious mechanics 'have even pawned their beds, wedding rings and almost every article they were possessed of'.
Around the same time lotteries were particularly popular in newly independent America because of an antipathy to paying taxes. By then it was not so much taxation without representation that people objected to, but taxation with or without representation. As early as 1791 the US national government, then three years old, decided that lotteries were the obvious mechanism to raise capital for the development of manufacturing and commerce. The Secretary of the Treasury, Alexander Hamilton, had very sophisticated ideas about how lotteries should be run. They should be understandable and accessible with as few obstacles as possible 'between hope and gratification'. The tickets should be cheap and there should be lots of prizes. 'Everybody, almost, can and will be willing to hazard a trifling sum for the chance of considerable gain,' Hamilton believed. To raise $30,000 Hamilton recommended the sale of 50,000 tickets at $4 each, bringing in $200,000. There would be a top prize of $20,000 and the lesser prizes should descend to 400 prizes of $100.
Lotteries were popular with civic leaders in America because there were few alternative ways of raising money to build new bridges or schools. New taxes were impractical and there was widespread suspicion of other fundraising mechanisms such as bonds. The fear was that by the time the bond matured the issuer might be insolvent or have disappeared.
Thomas Jefferson was among those who considered lotteries to be socially useful, despite a consistent thread of opposition on moral and religious grounds. 'If we consider games of chance immoral, then every pursuit of human industry is immoral; for there is not one that is not subject to chance, not one wherein you do not risk a loss for the chance of some gain. But the greatest of all gamblers is the farmer,' Jefferson argued. The US president believed games of chance such as cards or dice produced nothing useful for society, whereas lotteries did. Ivy League universities such as Yale, Princeton and Harvard used lotteries to finance building projects. Lotteries also helped pay for the War of Independence, and in the years immediately after independence Wall Street brokers did more business in lottery tickets than in stocks and bonds. By 1790 more than 2,000 lotteries were operating in the US. In New York and Philadelphia alone, more than $4 million worth of tickets a year were sold. It is even recorded that slaves bought tickets in the hope of winning enough money to buy their freedom. Alongside lotteries designed to raise money for worthy causes there were an increasing number of private, unlicensed lotteries which were often marked by outright fraud, with the organizers simply selling the tickets and vanishing before the lottery was drawn. There were cases of wholly fictitious lotteries in Boston and examples from Maine where organizers were accused of creaming off huge profits before paying out the prizes. Such behaviour started to raise questions in the US, as in Britain, as to whether lotteries should be outlawed once and for all.