In the beginning
The first recorded signs of a lottery are keno slips from the Chinese Han Dynasty between 205 and 187 BC. These lotteries are believed to have helped to finance major government projects like the Great Wall of China. From the Chinese "The Book of Songs" (2nd millennium BC.) comes a reference to a game of chance as "the drawing of wood", which in context appears to describe the drawing of lots. From the Celtic era, the Cornish words "teulel pren" translates into "to throw wood" and means "to draw lots". The Iliad of Homer refers to lots being placed into Agamemnon's helmet to determine who would fight Hector.
The first known European lotteries were held during the Roman Empire, mainly as an amusement at dinner parties. Each guest would receive a ticket, and prizes would often consist of fancy items such as dinnerware. Every ticket holder would be assured of winning something. This type of lottery, however, was no more than the distribution of gifts by wealthy noblemen during the Saturnalian revelries. The earliest records of a lottery offering tickets for sale is the lottery organized by Roman Emperor Augustus Caesar. The funds were for repairs in the City of Rome, and the winners were given prizes in the form of articles of unequal value.
The first recorded lotteries to offer tickets for sale with prizes in the form of money were held in the Low Countries in the 15th century. Various towns held public lotteries to raise money for town fortifications, and to help the poor. The town records of Ghent, Utrecht, and Bruges indicate that lotteries may be even older. A record dated May 9, 1445 at L'Ecluse refers to raising funds to build walls and town fortifications, with a lottery of 4,304 tickets and total prize money of 1737 florins. In the 17th century it was quite usual in the Netherlands to organize lotteries to collect money for the poor or in order to raise funds for all kinds of public usages. The lotteries proved very popular and were hailed as a painless form of taxation. The Dutch state-owned Staatsloterij is the oldest running lottery.
Citing his service to Virginia and the nation, Jefferson applied to the state legislature to grant him a lottery to pay off his debts. They agreed, tickets were issued, but the lottery was never conducted.
The first recorded Italian lottery was held on January 9, 1449 in Milan organized by the Golden Ambrosian Republic to finance the war against the Republic of Venice.
However, it was in Genoa that Lotto became very popular. People used to bet on the name of Great Council members, who were drawn by chance, five out of ninety candidates every six months . This kind of gambling was called Lotto or Semenaiu. When people wanted to bet more frequently than twice a year, they began to substitute the candidates names with numbers and modern lotto was born, to which both modern legal lotteries and the illegal Numbers game can trace their ancestry.
In modern times
The National Lottery in the United Kingdom was established in 1994. All prizes are paid as a lump sum and are tax-free. Of all money spent on National Lottery games, 50% goes to the prize fund, 28% to 'good causes' as set out by Parliament (though some of this is considered by some to be a stealth tax levied to support the Big Lottery Fund, a fund constituted to support public spending), 12% to the UK Government as duty, 5% to retailers as commission, and a total of 5% to operator Camelot, with 4.5% to cover operating costs and 0.5% as profit.
It was announced during the live Saturday night draw show on 30 March 2007 that The National Lottery has so far raised £20 billion (US$39.2 billion) for 'good causes', a programme which distributes money via grants.
A cinematic ad directed by Hollywood director John Hillcoat shows one of the many "Life Changing" good causes the National Lottery funds.
Lotteries in Australia include various lottery related products licensed by Australian lottery companies. Lotteries operators are licensed at a state or territory level, and include both state government-owned and private sector companies. In August 2008, at a homecoming ceremony for Australian Olympic athletes, Prime Minister Kevin Rudd said he was considering a UK-style national lottery to fund Australia's Olympic sports
The South African National Lottery was established in 2000 and is the most popular form of gambling in South Africa by value and number of players. In the 2007 fiscal year transaction values totalled R3.972 billion, with an average of five million transactions per week. Under the current operator 34 percent of revenue is paid to a central charitable distribution fund, up from an initial 28 percent. Six percent of revenue is paid as retail commission, ten percent is retained as operational costs and 50 percent is paid in prizes.
In the United States, lotteries are run by 47 jurisdictions: 44 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. In the US, lotteries are subject to the laws of each jurisdiction; there is no national lottery.
State lotteries have become a significant source of revenue for the 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
E.g. the New York Lottery contributed $3.04 billion in fiscal year 2012-2013 to help support education in New York State, nearly 15 percent of total state education funding to local school districts. The New York Lottery continues to be North America's largest and most profitable Lottery, earning over $48.3 billion in education support statewide since its founding over 45 years ago.