The tradition of lotteries came to America from Europe, where they first started gaining traction in the 16th century. According to one scholar, the first lottery used to raise government revenue and offer a cash prize was held in Florence, Italy, in 1530. Soon France picked up on this innovative means of raising money, and the British crown adopted the lottery in 1569. By the 1700s, lotteries were a popular way to raise money for all sorts of projects and were seen less as a sinful pastime than a civic duty. In the early 18th century, The Independent reports, the Archbishop of Canterbury lent his good name to lotteries funding the British Museum and Westminster Bridge.

From the earliest days of colonial history in America, lotteries were essential to the project’s survival. In the summer of 1612, the Virginia Company held a lottery to raise additional funding for the struggling settlement at Jamestown. (A tailor named Thomas Sharplisse won the largest prize—4,000 crowns, a small fortune.) Three years later, the company tried the same gambit, with a focus on the greater good that would come from white people colonizing the New World. “As pitched by the Virginia Company, buying a lottery ticket was an act of charity that could save a savage’s soul,” Matthew Sweeney writes in The Lottery Wars.

The Continental Congress used lotteries to raise money, 1776. 

The Continental Congress used lotteries to raise money, 1776. RON SHELLEY/PUBLIC DOMAIN

Lotteries didn’t just save the Virginia Company’s settlers from starvation, though. When the colonies revolted against the crown, lotteries helped the new United States of America survive. In 1776, the Constitutional Congress held one to benefit the soldiers of the Revolution. (Since the value of the new country’s currency was fluctuating wildly, it was less successful than hoped.) Once the colonies won the war, the new states leaned heavily on lotteries to raise revenue, in part because they were not eager to tax newly independent citizens who’d just rebelled against taxation by a central authority. Lotteries funded the growth of the country’s earliest colleges, including the College of New Jersey (later Princeton), Dickinson College, Harvard, and Yale, of many, many churches, and of iconic buildings, including Boston’s Faneuil Hall, which needed to be rebuilt after it burned down in 1761.

But in the 19th century, the popularity of lotteries waned as they were haunted by corruption. It was easy enough to announce a lottery, sell tickets, and abscond with the money without offering a prize. In New York and Massachusetts, lotteries were banned in the 1830s, and later in the century most states followed suit. Government lotteries wouldn’t become popular again until the second half of the 20th century, when states started using them once again—to raise revenue without raising taxes.

In the United States, lotteries are run by 48 jurisdictions: 45 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

Lotteries are subject to the laws of and operated independently by each jurisdiction, and there is no national lottery organization. However, consortiums of state lotteries jointly organize games spanning larger geographical footprints, which in turn, carry larger jackpots. Two major lottery games, Mega Millions and Powerball, are both offered in nearly all jurisdictions that operate lotteries, and serve as de facto national lotteries.

In fiscal 2018, Americans spent $77.7 billion on various lotteries, up about $5 billion from 2017.[1]

History

Historian Neal Millikan using newspaper advertisements in the colonial era found at least 392 lotteries were held in the 13 colonies.[2]

Lotteries were used not only as a form of entertainment but as a source of revenue to help fund the colonies. The financiers of Jamestown, Virginia, for instance, funded lotteries to raise money to support their colony.[3] These lotteries were quite sophisticated for the time period and even included instant winners.[3] Not long after, each of the 13 original colonies established a lottery system to raise revenue.[3]

In the early post-independence era, legislators commonly authorized lotteries to fund schools, roads, bridges, and other public works.[4] Evangelical reformers in the 1830s began denouncing lotteries on moral grounds and petitioned legislatures and constitutional conventions to ban them.[5] Recurring lottery scandals and a general backlash against legislative corruption following the Panic of 1837 also contributed to anti-lottery sentiments.[5] From 1844 to 1859 alone, 10 new state constitutions contained lottery bans.[5] By 1890, lotteries were prohibited in every state except Delaware and Louisiana.[6]

Lotteries in the United States did not always have sterling reputations. One early lottery in particular, the National Lottery, which was passed by Congress for the beautification of Washington, D.C. and was administered by the municipal government, was the subject of a major U.S. Supreme Court decision – Cohens v. Virginia.[7]

The lottery never paid out,[3][clarification needed] and it brought to light the prevalent issue of crookedness amongst the lotteries in the United States. The wave of anti-lottery protests finally broke through when, by 1860, all states had prohibited lotteries except Delaware, Missouri, and Kentucky.[3] The scarcity of lotteries in the United States meant that tickets were shipped across the country and eventually led to the creation of illegal lotteries.[3] In 1868, after years of illegal operation, the Louisiana State Lottery Company obtained a 25-year charter for its state lottery system.[3] The charter was passed by the legislature due to immense bribing from a criminal syndicate in New York.[3] The Louisiana Lottery Company derived 90% of its revenue from tickets sold across state borders.[3] These continued issues of corruption led to the complete prohibition of lotteries in the United States by 1895.[3] It was discovered that the promoters of the Louisiana Lottery Company had accrued immense sums of money from illegitimate sources and that the Legislature was riddled with bribery.[3] Before the advent of government-sponsored lotteries, many illegal lotteries thrived, such as number games.

Modern era

The first modern government-run US lottery was established in Puerto Rico in 1934.[8] This was followed, decades later, by the New Hampshire Lottery in 1964. Instant lottery tickets, also known as scratch cards, were introduced in the 1970s and have become a major source of lottery revenue. Individual lotteries often feature three-digit and four-digit games akin to numbers games; a five number game, and a six number game (the latter two often have a jackpot.) Some lotteries also offer at least one game similar to keno, and some offer video lottery terminals. Presently, many US lotteries support public education systems.

As of November 2019, lotteries are established in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands; the most recent U.S. state to legalize a lottery is Mississippi, with lottery commission members receiving appointments on October 19, 2018.[9]

The first U.S. multi-state lottery game was formed in 1985 in Maine, New Hampshire, and Vermont; its flagship game remains Tri-State Megabucks. In 1988, the Multi-State Lottery Association (MUSL) was formed with Iowa, Kansas, Missouri, Oregon, Rhode Island, West Virginia, and the District of Columbia as its charter members; it is best known for Powerball, which was designed to create large jackpots. Another joint lottery, The Big Game (now called Mega Millions), was formed in 1996 by six lotteries as its charter members.

As of October 2020, each of the 45 state lotteries offer both Mega Millions and Powerball as a result of a 2009 agreement between the Mega Millions consortium and MUSL to cross-license their game to one another's members, although the two organizations continue to administer Mega Millions and Powerball separately. Mississippi was the most recent to join both, beginning sales in January 2020. Puerto Rico is the only jurisdiction not to offer both, as they do not offer Mega Millions.

State revenues

State lotteries have become a significant source of revenue for states, raising $17.6 billion in profits for state budgets in the 2009 fiscal year (FY) with 11 states collecting more revenue from their state lottery than from their state corporate income tax during FY2009.[10]

Lottery policies within states can have conflicting goals.[11] Given that instructions are passed down from state legislatures, lottery implementation is often expected to be carried out with reduced advertising and funding while still producing the same amount of revenue.[11] This issue led states to look for loopholes in the system. Massachusetts, for example, had its advertising budget dramatically cut, and therefore started using free-play coupons as money to pay for advertising.[11] This led to an IRS investigation into alleged non-reporting of income because the IRS considered the coupons to have monetary value.[11]

States with no lotteries

Among the states that do not have lotteries, Alabama cites religious objections and Utah's state constitution bans all forms of gambling.[12] Nevada's gambling industry has lobbied against a state lottery there, fearing the competition;[13] similarly, the Mississippi Gaming Commission expressed concern that a state lottery would constitute a "competing force" for gambling dollars spent at Mississippi casinos. Despite this, in August 2018, Mississippi passed legislation to create a state lottery. Governor Phil Bryant expressed his support for the lottery to fund transportation in the state and has indicated he will sign the bill. Sales, initially only scratch tickets, began on November 25, 2019. Mega Millions and Powerball tickets became available to the state on January 30, 2020.[14]

Alaska and Hawaii, being outside the contiguous United States, have not felt the pressure of losing sales to competitors.[12] However, in February 2020, Alaska's governor Mike Dunleavy introduced legislation proposing the establishment of an Alaska Lottery Corporation, as part of an effort to overcome a budgetary deficit.[15]

The Washington City Canal was a canal in Washington, D.C., that operated from 1815 until the mid-1850s. The canal connected the Anacostia River, termed the "Eastern Branch" at that time, to Tiber Creek, the Potomac River, and later the Chesapeake and Ohio (C&O) Canal. The canal fell into disuse during the late 19th century and the city government covered over or filled in various sections in 1871.

The canal's Lockkeeper's House, built in 1837 near the present-day intersection of 17th Street and Constitution Avenue NW, was preserved and is now the second oldest building on the National Mall.[1][2]

History

Early planning and development

Further information: History of Washington, D.C. § Plan of the City of Washington

Library of Congress

View of the City of Washington in 1792, showing Goose Creek (Tiber Creek) and James Creek (18??).

Boston Public Library

Facsimile of manuscript of Peter Charles L'Enfant's 1791 plan for the federal capital city (United States Coast and Geodetic Survey, 1887).[3]

Library of Congress

L'Enfant Plan as revised by Andrew Ellicott incorporating the Canal.

During the early years of the United States there was great interest among political leaders in building canals for economic development. Construction of a canal to run across the city of Washington was endorsed by politicians and local businessmen.[4] The plan was to connect the Eastern Branch, which was navigable into Maryland, with the Potomac, which was considered a major route to the West. President George Washington had initiated the Potowmack Company in 1785 to improve navigation on the Potomac.

Pierre (Peter) Charles L'Enfant, designing a master plan for the development of the capital city, provided for the construction of a canal between the Eastern Branch and Tiber Creek.[5] To raise funds for canal construction, lotteries were conducted during 1796, but these efforts were unsuccessful. There was little additional work done until 1802, when Congress granted a charter for the Washington Canal Company. A small amount of construction was started, but obtaining major financing for the canal continued to be difficult.

Congress created a new canal company in 1809 and authorized a capitalization of $100,000. A groundbreaking ceremony in southeast Washington, attended by President James Madison and other officials, occurred on May 2, 1810. Construction was delayed by the War of 1812 and resumed in 1815.

Canal opening and operation

The Canal in front of the Capitol Building in construction (1860).

The Canal in front of the Capitol and the US Botanical Gardens.

The canal was opened formally during late 1815.[6] The canal route began at the Eastern Branch, near the Washington Navy Yard and proceeded north and northwest. Another planned branch proceeded north and northeast from the estuary of James Creek, which divided Greenleaf Point from Buzzard Point but was only constructed in 1866 and never connected with the existing canal.[7] Past the point at which these two branches were planned to converge, a single canal channel traveled northward towards the Capitol, veered northwestward at the base of Jenkins Hill (Capitol Hill), and then turned again to the north to cross the area in which the National Mall is now located. The canal then turned sharply to the west, joining a straightened and channelized Tiber Creek, which had earlier flowed westward. After traveling westward along the route of Tiber Creek, the canal entered the Potomac River at the outlet of the creek, which was south of the White House.

As originally built, the Washington City Canal was shallow and only accommodated boats drawing 3 feet of water or less. The canal's design did not adequately handle tidal variations of the Eastern Branch. As a result, the canal sometimes overflowed its banks at high tide, and/or experienced insufficient water levels at low tide. Traffic through the canal continued but financial problems persisted, and in 1831 the city purchased the canal corporation. The city effected some repairs during the 1830s and Congress appropriated some additional funds during 1833.

Also in 1833, an extension of the Chesapeake and Ohio Canal was completed. That extension, designated as the Washington Branch of the C&O Canal, enabled the C&O Canal to connect at a new eastern terminus with the western terminus of the Washington City canal at the outlet of Tiber Creek.[8][9][10] A lock was built to connect the two canals, and about 1835, a lock keeper's house was built. The lock keeper's house now stands at the southwest corner of Constitution Avenue NW and 17th Street NW, near the National Mall.[11][12]

In 1849, Congress appropriated some additional funds to clean out and deepen portions of the canal, on the condition that the city provide matching funds. The city made some improvements to the canal, but it experienced problems with contractors and staff, and the planned work was not completed during the 1850s. During this period, with the increasing development of railroads, interest in canals decreased among both businessmen and government officials. (The Baltimore and Ohio Railroad was the first railroad to enter Washington, in 1835.[13])

Decline

The Canal in 1863 with the Smithsonian Castle and Armory Square Hospital.

By the late 1850s, the Washington City Canal had become disused, as had the Washington branch of the C&O Canal. During the Civil War years the canal deteriorated further and was serving as both a sewer and storm drain system for the central part of the city. Various proposals were made to either rehabilitate the city canal or fill it in. Congress appropriated some funds during 1866, but no work was done at that time. In 1871, Alexander "Boss" Shepherd, the city's director of Public Works, directed that the Tiber Creek portion of the canal be covered over. This work was accomplished over many years, along with other drainage alterations in the central city. A new street that was constructed over this portion of the canal was designated initially as B Street NW. The street was later renamed Constitution Avenue NW.

The southern portion of the Washington City Canal remained open for years afterward, but was eventually paved over. The section between South Capitol and New Jersey Avenue was filled in during the late 1870s and the section east of that in the early 1880s. The section east of South Capitol was filled in gradually between 1928 and 1930. A street constructed south of the Capitol over that section of the canal now connects Independence Avenue, Southwest, and E Street, Southeast. Formerly designated as Canal Street, the northernmost section of the street was later renamed Washington Avenue in commemoration of the state of Washington.[14]

At present, the streams flowing under the city in the sewers are often referred to as Tiber Creek though its common past with the Canal is acknowledged.[15]

Daniel Carroll of Duddington (1764-1849) was the son of Charles Carroll of Duddington (1729-1773) (sometimes also referred to as Charles Carroll of Carrollsburg, and not to be confused with his cousin, Charles Carroll of Carrollton, (1737-1832) signer of the Declaration of Independence).

Charles Carroll of Duddington had inherited a large tract of land from his father, Daniel Carroll of Duddington (1707-1734), who had in turn received it when he married Ann Rozer.

Daniel Carroll was one of those who owned a fair piece of the Federal City in 1790, in fact, he owned all of the land on which the Capitol now sits.

Carroll of Duddington never made the money from this stroke of fortune that he had hoped. It all began when he built a new home for himself in 1791 – unfortunately, right where Pierre L’Enfant had planned for New Jersey Avenue SE was to run. Major L’Enfant had the house torn down in the middle of the night. Carroll, who was not a part of a prominent family for nothing, complained to President Washington, as well as to the Commissioners of DC. As one of these was Daniel Carroll of Rock Creek, his father’s second cousin, it is unsurprising that his complaint fell on fertile ground, and in short order, L’Enfant had been fired, and the commissioners had paid Daniel Carroll $4,000 for his pains.

Thus in 1793, Daniel Carroll was ready to begin again. This time, he built entirely within square 736. The four acres of ground were enclosed by a brick wall, and within were – along with the grand mansion – a number of smaller buildings, including servants quarters. Pictures from the time show a wide two-story house with a large porch out front. It was built in the simple Federal style of the time.

Duddington Manor, ca 1880. This is pretty much the only picture remaining of the house (Library of Congress)

Carroll had expected his land, most of which was east of the Capitol, to rapidly rise in value. After all, L’Enfant’s plan had promised as much. Unfortunately, the Frenchman was no longer in charge, and for various reasons (not the least of which being that Daniel Carroll demanded far too much for his lands) DC grew up to the west of the Capitol.

Daniel Carroll retreated into his house, and spent much of the later years of his life a recluse there. His unmarried daughters continued to live there after his death in 1849, but in 1886, they sold out the lands to a developer, the mansion was razed, and replaced with simple worker’s rowhouses. All that remains to remind us of this once-grand mansion is the short street Duddington Place, which runs from 1st to 2nd Streets SE between E and F.