Lotteries for Public Revenue

Report Outline
The New American Interest in Lotteries
Use of Lotteries by Foreign Governments
History of Lotteries in the United States
Current Proposals to Legalize Lotteries

The New American Interest in Lotteries

Estimates of Expenditures on Illegal Lotteries

Financial stringency caused by the long depression has revived public interest in lotteries as a means of raising governmental revenues. Lotteries were extensively used to finance public works in the early days of the republic, but the fraud and corruption connected with many of them led the states, beginning in the 1830's, to pass laws by which they were forbidden. Federal legislation denying mail privileges to lottery tickets abolished the last state lottery, that of Louisiana, in 1S90. Anti-lottery laws are now found on the statute books of every state.

Despite state and federal anti-lottery legislation, citizens of the United States participate extensively in lotteries managed by foreign governments. as well as in all sorts of illegal lotteries operated in this country. Rep. Kenney (D., N. J.), author of a bill to establish a national lottery, estimates that about $200,000,000 is taken out of the United States annually by foreign lotteries. The Post Office Department places the figure much higher, asserting that it has reached $1,000,000,000 a year. In addition, an enormous amount of money is taken in by church raffles, fraternal lotteries, number and policy games, baseball pools, slot machines, and business contests with lottery features. The total yearly sum spent in this country for lotteries of all types has been estimated to range between $4,000,000,000 and $6,000,000,000.

Proposals for Revival of Public Lotteries

Within the last year a number of suggestions have been offered that governmental units employ the lottery to raise needed revenue that taxation has been unable to produce. The Kenney bill would authorize the Veterans' Administration to raise funds not exceeding $1,000,000,000 in any one year by means of lotteries, the funds to be used for defraying governmental expenditures, including those authorized for veterans and their dependents. The measure was suggested to him, Kenney said, by the Economy act, which put nearly half a million ex-soldiers off the pension rolls, and reduced the annual expenditures for veterans by almost half a billion dollars. Some of these pensioners have since been reinstated, and under the Kenney bill all would be put back. Hearings were held upon the bill on April 11, and it is now in the hands of a subcommittee of the House Committee on Ways and Means. Lottery proposals have also been made in several states and municipalities, including New York City, and it has been suggested that a part of the proceeds of a national lottery might be divided among the states.