Sunday, September 26, 2010
Lotteries in popular culture
In George Orwell’s novel 1984, in Oceania there are frequent large lotteries and the proles buy lottery tickets hoping for a big win.
Problems
Side-effects
There can be some problems associated with winning a lottery jackpot. Those of a poor socioeconomic background may not have proper money management skills. In addition, there are security and safety risks associated with publicly announcing the lottery winners such as holding family members for ransom. Winners some times feel anomie from the dramatic change of lifestyles.
In some US States, such as Kansas and Minnesota, losing lottery tickets can be mailed in for a raffle of special prizes. The trouble with that is that employees of stores that sell lottery tickets sometimes collect the lottery tickets that are thrown away and send them in. As a lottery official put it "The retailers have an unlimited supply of free tickets. You do not need to be an FBI agent to realize that is a tremendously unfair advantage." [12]
Some advance fee fraud scams on the Internet are based on lotteries. The fraud starts with spam congratulating the recipient on their recent lottery win. The email explains that in order to release funds the email recipient must part with a certain amount (as tax/fees) as per the rules or risk forfeiture.
Another form of lottery scam involves the selling of "systems" which purport to improve a player's chances of selecting the winning numbers in a Lotto game. These scams are generally based on the buyer's (and perhaps the seller's) misunderstanding of probability and random numbers. Sale of these systems or software is legal, however, since they mention that the product cannot guarantee a win, let alone a jackpot.
There can be some problems associated with winning a lottery jackpot. Those of a poor socioeconomic background may not have proper money management skills. In addition, there are security and safety risks associated with publicly announcing the lottery winners such as holding family members for ransom. Winners some times feel anomie from the dramatic change of lifestyles.
[edit] Scams and frauds
Lottery, like any form of gambling, is susceptible to fraud, despite the high degree of scrutiny claimed by the organizers. One method involved is to tamper with the machine used for the number selection. By rigging a machine, it is theoretically easy to win a lottery.[citation needed] This act is often done in connivance with an employee of the lottery firm.[citation needed] Methods used vary; loaded balls where select balls are made to pop-up making it either lighter or heavier than the rest.[citation needed]In some US States, such as Kansas and Minnesota, losing lottery tickets can be mailed in for a raffle of special prizes. The trouble with that is that employees of stores that sell lottery tickets sometimes collect the lottery tickets that are thrown away and send them in. As a lottery official put it "The retailers have an unlimited supply of free tickets. You do not need to be an FBI agent to realize that is a tremendously unfair advantage." [12]
Some advance fee fraud scams on the Internet are based on lotteries. The fraud starts with spam congratulating the recipient on their recent lottery win. The email explains that in order to release funds the email recipient must part with a certain amount (as tax/fees) as per the rules or risk forfeiture.
Another form of lottery scam involves the selling of "systems" which purport to improve a player's chances of selecting the winning numbers in a Lotto game. These scams are generally based on the buyer's (and perhaps the seller's) misunderstanding of probability and random numbers. Sale of these systems or software is legal, however, since they mention that the product cannot guarantee a win, let alone a jackpot.
Payment of prizes
Winnings (in the U.S.) are not necessarily paid out in a lump sum, contrary to the expectation of many lottery participants. In certain countries, mainly the U.S., the winner gets to choose between an annuity payment and a one-time payment. The one-time payment is much smaller than, indeed often only half of, the advertised lottery jackpot, even before applying any withholdings to which the prize may be subject. While taxes vary by state and how on winnings are invested, a rough rule of thumb is that a winner who takes a lump sum can reasonably expect to pocket 1/3 of the jackpot amount after the initial tax withholding and additional taxes at the end of the tax year. Therefore, a winner of a $100,000,000 jackpot who takes a lump sum can roughly expect to have $33,000,000 after filing income tax documents for the year in which the jackpot was won.
The annuity option provides regular payments over a period that ranges from 10 to 40 years. Some U.S. lottery games, especially those offering a "lifetime" prize, do not offer a lump-sum option.
In some online lotteries, the annual payments can be as little as $25,000 over 40 years, with a balloon payment in the final year. This type of installment payment is often made through investment in government-backed securities. Online lotteries pay the winners through their insurance backup. However, many winners choose to take the lump-sum payment, since they believe they can get a better rate of return on their investment elsewhere.
In some countries, lottery winnings are not subject to personal income tax, so there are no tax consequences to consider in choosing a payment option. In Canada, Australia, Germany, Ireland, Italy and the United Kingdom all prizes are immediately paid out as one lump sum, tax-free to the winner. In Liechtenstein, all winnings are tax-free and the winner may opt to receive a lump sum or an annuity with regard to the Jackpot prizes.
In the United States, federal courts have consistently held that lump sum payments received from third parties in exchange for the rights to lottery annuities are not capital assets for tax purpose. Rather, the lump sum is subject to ordinary income tax treatment.
The annuity option provides regular payments over a period that ranges from 10 to 40 years. Some U.S. lottery games, especially those offering a "lifetime" prize, do not offer a lump-sum option.
In some online lotteries, the annual payments can be as little as $25,000 over 40 years, with a balloon payment in the final year. This type of installment payment is often made through investment in government-backed securities. Online lotteries pay the winners through their insurance backup. However, many winners choose to take the lump-sum payment, since they believe they can get a better rate of return on their investment elsewhere.
In some countries, lottery winnings are not subject to personal income tax, so there are no tax consequences to consider in choosing a payment option. In Canada, Australia, Germany, Ireland, Italy and the United Kingdom all prizes are immediately paid out as one lump sum, tax-free to the winner. In Liechtenstein, all winnings are tax-free and the winner may opt to receive a lump sum or an annuity with regard to the Jackpot prizes.
In the United States, federal courts have consistently held that lump sum payments received from third parties in exchange for the rights to lottery annuities are not capital assets for tax purpose. Rather, the lump sum is subject to ordinary income tax treatment.
Notable prizes
| Prize (local currency) | Lottery | Country | Winner | Date | Notes |
|---|---|---|---|---|---|
| $390m | Mega Millions |  United States | Won by one ticket holder from New Jersey and one from Georgia | 6 March 2007 | World's largest jackpot |
| $365m | Powerball | United States | One ticket bought jointly by eight co-workers at a Nebraska meat processing plant | 18 February 2006 | World's largest single ticket winner |
| $363m | The Big Game | United States | Two winning tickets: Larry and Nancy Ross (Michigan), Joe and Sue Kainz (Illinois) | 9 May 2000 | The Big Game is now named Mega Millions |
| $314.9 Million | Powerball | United States | Andrew Jackson “Jack” Whittaker, Jr. | 2002-12-25 | World's largest single person winner |
| €180m | EuroMillions |  France ×2, Portugal ×1 | Three ticket holders | 3 February 2006 | Europe's largest jackpot |
| €147,8m | SuperEnalotto |  Italy | One ticket holder from Bagnone (Toscana) | 22 August 2009 | Europe's largest single winner |
| €126m | EuroMillions |  Spain | Anonymous 25 year-old woman | 8 May 2009 | Largest single winner in EuroMillions. |
| £42m | National Lottery |  United Kingdom | Three ticket holders | 6 January 1996 | |
| €37.6m | National Lottery |  Germany | Won by a nurse from North Rhine-Westphalia | 7 October 2006 | Largest German prize and single winner |
| €25m | State Lottery |  Netherlands | Ticket sold in The Hague | 10 July 2008 | Tax free lump sum |
| €115m | Euro Millions |  Ireland | Dolores McNamara | August 2005 | Biggest single winner and jackpot (Ireland) Tax free lump sum |
| €42m | Jordan Banks | August 2008 | Tax free lump sum | ||
| ₱347.8m (US$4.765m) | Philippine Lotto Draw |  Philippines | Two winners in Luzon | 22 February 2009 | Asia's largest prize |
| R$145m | Mega-Sena |  Brazil | Won by one ticket holder from Brasília (Federal District) and one from Santa Rita do Passa Quatro (São Paulo) | 31 December 2009 | South America's largest prize |
| £56m | EuroMillions | United Kingdom | Nigel Page and his partner Justine Laycock. The total jackpot of £113m was shared with a winner in Spain. | 12 January 2010 | Britain's biggest ever lottery prize |
Probability of winning
The chances of winning a lottery jackpot are determined by several factors, including: the count of possible numbers, the count of winning numbers drawn, whether or not order is significant, and whether drawn numbers are returned for the possibility of further drawing.
In a 6-from-49 lotto, a player chooses six numbers from 1 to 49 (no duplicates are allowed). If all six numbers on the player's ticket match those produced in the official drawing, then the player is a jackpot winner. This is true regardless of the order in which the numbers are drawn. For such a lottery, the odds of being a jackpot winner are only 1 in 13,983,816 (note that most lotteries have much worse odds). The derivation of this result (and other winning odds) is shown in the Lottery mathematics article. To put these odds in perspective, suppose a person buys one lottery ticket per week. In a quarter-million years of play, the person would be expected to win the jackpot only once (13,983,816 weeks is roughly 269,000 years). For another example, if someone buys a ticket every other second for one year, he would probably win the jackpot just once.
The odds of winning any actual lottery can vary widely depending on the lottery design of financial engineers[clarification needed]. Mega Millions is a very popular multi-state lottery in the United States which is known for jackpots that grow very large from time to time. This attractive feature is made possible simply by designing the game to be extremely difficult to win: 1 chance in 175,711,536. That's over twelve times higher than the example above. Mega Millions players also pick six numbers, but two different groups of numbers are used. The first five numbers come from one group that contains numbers from 1 to 56. The sixth number – the "Mega Ball number" – comes from the second group, which contains numbers from 1 to 46. To win a Mega Millions jackpot, a player's first five numbers must match the first five numbers drawn and the Mega Ball number chosen must match the Mega Ball number drawn. In other words, it is not good enough to pick 10, 18, 25, 33, 42 / 7 when the drawing is 7, 10, 25, 33, 42 / 18. Even though the player picked all the right numbers, the Mega Ball number at the end of the ticket doesn't match the one drawn, so the ticket would be credited with matching only four numbers (10, 25, 33, 42).
The SuperEnalotto of Italy is possibly the most difficult, as players try to match 6 numbers out of 90. The odds in making the jackpot: 1 in 622,614,630.
Most lotteries give lesser prizes for matching just some of the winning numbers. The Mega Millions game is an extreme case, giving a very small payout (US$2) even if a player matches only the final Mega Ball number on the ticket. The weekly 6/49 lottery operated by the ILLF[citation needed] offers a two-ball cash prize to make the odds of winning some prize only 1 in 6.63. Matching more numbers, the payout goes up. Although none of these additional prizes affect the chances of winning the jackpot, they do improve the odds of winning something and therefore add a little to the value of the ticket. On the other hand, multiple smaller prizes usually mean smaller jackpots. It is very common for the jackpot to be split evenly if multiple players have tickets with all the winning numbers.
In the UK National Lottery the smallest prize is £10 for matching three balls. There exists a Wheeling Challenge to create the smallest set of tickets to cover enough combinations to ensure that any 6 numbers drawn will match against at least 3 numbers on at least one of the tickets. The current record is 163 tickets.
The expected value of lottery bets is often notably low. In the United States, an expected value of 50% of the purchase price is available only in the small-payout, non-jackpot games. For example, when a player buys a "pick-4" lottery ticket for $1.00, he might be getting a ticket with an expected value of only $0.50. Hence, buying a lottery ticket reduces the buyer's expected net worth. This is in sharp contrast with financial securities like stocks and bonds whose prices are theoretically based on their economic value, as judged by the markets at any given point in time.
Lotteries are sometimes described as a regressive tax, albeit a voluntary one, since those most likely to buy tickets, and to spend a larger proportion of their money on them, are typically less affluent people. The astronomically high odds against winning the larger prizes have also led to the epithets of a "tax on stupidity" and a "math tax". Although the use of the word "tax" is not strictly correct, these descriptions are intended to suggest that lotteries are government-sanctioned operations which will attract only those people who fail to understand that buying a lottery ticket is a poor economic decision. Indeed, after taking into account the present value of a given lottery prize as a single lump sum cash payment, the impact of any taxes that might apply, and the likelihood of having to share the prize with other winners, it is not uncommon to find that a ticket for a major lottery is worth less than one third of its purchase price. In other words, if a lottery ticket costs US$1 to purchase, its true economic worth may be only US$0.33 or so at the time of purchase. Of course, this is just a hypothetical example, and the actual value will depend on the details of each lottery. Some lotteries may offer tickets that are worth less than 20% of their price, while others may be worth over 50%. To raise money, lottery operators must offer tickets worth much less than what one pays for them, so the lottery is a bad choice for customers trying to come out ahead.
In a famous occurrence, a Polish-Irish businessman named Stefan Klincewicz bought up almost all of the 1,947,792 combinations available on the Irish lottery. He and his associates paid less than one million Irish pounds while the jackpot stood at £1.7 million. There were three winning tickets, but with the "Match 4" and "Match 5" prizes, Klincewicz made a small profit overall.
In a 6-from-49 lotto, a player chooses six numbers from 1 to 49 (no duplicates are allowed). If all six numbers on the player's ticket match those produced in the official drawing, then the player is a jackpot winner. This is true regardless of the order in which the numbers are drawn. For such a lottery, the odds of being a jackpot winner are only 1 in 13,983,816 (note that most lotteries have much worse odds). The derivation of this result (and other winning odds) is shown in the Lottery mathematics article. To put these odds in perspective, suppose a person buys one lottery ticket per week. In a quarter-million years of play, the person would be expected to win the jackpot only once (13,983,816 weeks is roughly 269,000 years). For another example, if someone buys a ticket every other second for one year, he would probably win the jackpot just once.
The odds of winning any actual lottery can vary widely depending on the lottery design of financial engineers[clarification needed]. Mega Millions is a very popular multi-state lottery in the United States which is known for jackpots that grow very large from time to time. This attractive feature is made possible simply by designing the game to be extremely difficult to win: 1 chance in 175,711,536. That's over twelve times higher than the example above. Mega Millions players also pick six numbers, but two different groups of numbers are used. The first five numbers come from one group that contains numbers from 1 to 56. The sixth number – the "Mega Ball number" – comes from the second group, which contains numbers from 1 to 46. To win a Mega Millions jackpot, a player's first five numbers must match the first five numbers drawn and the Mega Ball number chosen must match the Mega Ball number drawn. In other words, it is not good enough to pick 10, 18, 25, 33, 42 / 7 when the drawing is 7, 10, 25, 33, 42 / 18. Even though the player picked all the right numbers, the Mega Ball number at the end of the ticket doesn't match the one drawn, so the ticket would be credited with matching only four numbers (10, 25, 33, 42).
The SuperEnalotto of Italy is possibly the most difficult, as players try to match 6 numbers out of 90. The odds in making the jackpot: 1 in 622,614,630.
Most lotteries give lesser prizes for matching just some of the winning numbers. The Mega Millions game is an extreme case, giving a very small payout (US$2) even if a player matches only the final Mega Ball number on the ticket. The weekly 6/49 lottery operated by the ILLF[citation needed] offers a two-ball cash prize to make the odds of winning some prize only 1 in 6.63. Matching more numbers, the payout goes up. Although none of these additional prizes affect the chances of winning the jackpot, they do improve the odds of winning something and therefore add a little to the value of the ticket. On the other hand, multiple smaller prizes usually mean smaller jackpots. It is very common for the jackpot to be split evenly if multiple players have tickets with all the winning numbers.
In the UK National Lottery the smallest prize is £10 for matching three balls. There exists a Wheeling Challenge to create the smallest set of tickets to cover enough combinations to ensure that any 6 numbers drawn will match against at least 3 numbers on at least one of the tickets. The current record is 163 tickets.
The expected value of lottery bets is often notably low. In the United States, an expected value of 50% of the purchase price is available only in the small-payout, non-jackpot games. For example, when a player buys a "pick-4" lottery ticket for $1.00, he might be getting a ticket with an expected value of only $0.50. Hence, buying a lottery ticket reduces the buyer's expected net worth. This is in sharp contrast with financial securities like stocks and bonds whose prices are theoretically based on their economic value, as judged by the markets at any given point in time.
Lotteries are sometimes described as a regressive tax, albeit a voluntary one, since those most likely to buy tickets, and to spend a larger proportion of their money on them, are typically less affluent people. The astronomically high odds against winning the larger prizes have also led to the epithets of a "tax on stupidity" and a "math tax". Although the use of the word "tax" is not strictly correct, these descriptions are intended to suggest that lotteries are government-sanctioned operations which will attract only those people who fail to understand that buying a lottery ticket is a poor economic decision. Indeed, after taking into account the present value of a given lottery prize as a single lump sum cash payment, the impact of any taxes that might apply, and the likelihood of having to share the prize with other winners, it is not uncommon to find that a ticket for a major lottery is worth less than one third of its purchase price. In other words, if a lottery ticket costs US$1 to purchase, its true economic worth may be only US$0.33 or so at the time of purchase. Of course, this is just a hypothetical example, and the actual value will depend on the details of each lottery. Some lotteries may offer tickets that are worth less than 20% of their price, while others may be worth over 50%. To raise money, lottery operators must offer tickets worth much less than what one pays for them, so the lottery is a bad choice for customers trying to come out ahead.
In a famous occurrence, a Polish-Irish businessman named Stefan Klincewicz bought up almost all of the 1,947,792 combinations available on the Irish lottery. He and his associates paid less than one million Irish pounds while the jackpot stood at £1.7 million. There were three winning tickets, but with the "Match 4" and "Match 5" prizes, Klincewicz made a small profit overall.
Country lottery details
In several countries, lotteries are legalized by the governments themselves[clarification needed]. Several on-line lotteries and traditional lotteries with online payments exist. In the on-line lotteries, the user has to select their number and must either watch an ad for a few seconds before the selection is confirmed, or click on a web banner/link to register the pick in the system. The numbers may be drawn by the site that runs the online lottery or might be linked to a major physical lottery draw to ensure reliability. Prize money ranges from $100,000 to $100 million.[4]
Even while the Omnibus Bill was still being written, Montreal mayor Jean Drapeau, trying to recover some of the money spent on the World’s Fair and the new subway system, announced a "voluntary tax". For a $2.00 "donation" a player would be eligible to participate in a draw with a grand prize of $100 000. According to Drapeau, this "tax" was not a lottery for two reasons. The prizes were given out in the form of silver bars, not money, and the "competitors" chosen in a drawing would have to reply correctly to four questions about Montreal during a second draw. That competition would determine the value of the prize that the winner would win. The replies to the questions were printed on the back of the ticket and therefore the questions would not cause any undue problems. The inaugural draw was held on May 27, 1968.
There were debates in Ottawa and Quebec City about the legality of this 'voluntary tax'. The Minister of Justice alleged it was a lottery. Montreal’s mayor replied that it did not contravene the federal law. While everyone awaited the verdict, the monthly draws went off without a hitch. Players from all over Canada, the United States, Europe, and Asia participated.
On September 14, 1968 the Quebec Appeal Court declared Mayor Drapeau’s "voluntary tax" illegal. However, the municipal authorities did not give up the struggle; the Council announced in November that the City would appeal this decision to the Supreme Court.
As the debate over legalities continued, sales dropped significantly, because many people did not want to participate in anything illegal. Despite offers of new prizes the revenue continued to drop monthly, and by the nineteenth and final draw, was only a little over $800 000.
On December 23, 1969 an amendment was made to the Canada's Criminal Code, allowing a provincial government to legally operate lottery systems.
The first provincial lottery in Canada was Quebec's Inter-Loto in 1970. Other provinces and regions introduced their own lotteries through the 1970s, and the federal government ran Loto Canada (originally the Olympic Lottery) for several years starting in the late 1970s to help recoup the expenses of the 1976 Summer Olympics. Lottery wins are generally not subject to Canadian tax, but may be taxable in other jurisdictions, depending on the residency of the winner.[5]
Today, Canada has two nation-wide lotteries: Lotto 6/49 and Lotto Max (the latter replaced Lotto Super 7 in September 2009). These games are administered by the Interprovincial Lottery Corporation, which is a consortium of the five regional lottery commissions, all of which are owned by their respective provincial and territorial governments:
Lotteries quickly became one of the most important resources for religious congregations in the 18th century, and helped to build or rebuild about 15 churches in Paris, including St. Sulpice and Le Panthéon. At the beginning of the century, the King avoided having to fund religious orders by giving them the right to run lotteries, but the amounts generated became so large that the second part of the century turned into a struggle between the monarchy and the Church for control of the lotteries. In 1774, the monarchy—specifically Madame de Pompadour--founded the Loterie de L'École Militaire to buy what is called today the Champ de Mars in Paris, and build a military academy that Napoleon Bonaparte would later attend; they also banned all other lotteries, with 3 or 4 minor exceptions. This lottery became known a few years later as the Loterie Royale de France. Just before the French Revolution in 1789, the revenues from La Lotterie Royale de France were equivalent to between 5 and 7% of total French revenues.
Throughout the 18th century, philosophers like Voltaire as well as some bishops complained that lotteries exploit the poor. This subject has generated much oral and written debate over the morality of the lottery. All lotteries (including state lotteries) were frowned upon by idealists of the French Revolution, who viewed them as a method used by the rich for cheating the poor out of their wages.
The Lottery reappeared again in 1936, called lotto, when socialists needed to increase state revenue. Since that time, La Française des Jeux (government owned) has had a monopoly on most of the games in France, including the lotteries. There have also been reports of lotteries regarding the mass guillotine executions in France. It has been said that a number was attached to the head of each person to be executed and then after all the executions, the executioner would pull out one head and the people with the number that matched the one on the head were awarded prizes (usually small ones); each number was 3-to-5 digits long.
The ILLF operates many websites, referred to as the ILLF brands. Combined, these brands offer a wide array of games to choose from.
Lottery winnings are not taxed in Liechtenstein.
The lotteries are drawn on Saturday and Wednesday. Lotto is sold via a network of computer terminals in shopping centers across the nation. The Lotto game was first played in 1987 and replaced New Zealand's original national lotteries, the Art Union and Golden Kiwi. Lotto is a pick 6 from 40 numbers game. The odds of winning the first division prize of around NZ$300,000 to NZ$2 million are 1 in 3,838,380.
The Powerball game is the standard pick 6 from 40 Lotto numbers with an additional pick 1 from 10 Powerball number. This game has odds of 1 in 38,383,800 and a first prize of between NZ$1 million and NZ$30 million.[6] In 2007 Powerball changed to a pick 1 of 10 game (formerly pick 1 of 8) and the minimum Powerball prize increased from $1 million to $2 million. Big Wednesday is a game played by picking 6 numbers from 45 plus heads or tails from a coin toss. A jackpot cash prize of NZ$1 million to NZ$15 million is supplemented with product prizes such as Porsche and Aston Martin cars, boats, holiday homes and luxury travel. The odds of winning first prize are 1 in 16,290,120.
Website operators independent of the state Lotteries Commission[7] began publishing online Lotto results[8] as early as 1998.[9] An interactive Lotto website authorised to sell tickets online was established in 2007.
Lottery winnings are not taxed in New Zealand.
Header from 1840 US patent on a new type of private lotteryPrivate lotteries were legal in the United States in the early 1800s.[10] In fact, a number of US patents were granted on new types of lotteries. In today's vernacular, these would be considered business method patents.
Before the advent of state-sponsored lotteries, many illegal lotteries thrived; for example, see Numbers game and Peter H. Matthews. The first modern state lottery in the U.S. was established in the state of New Hampshire in 1964; as of 2008, lotteries are established in 42 states, the District of Columbia, Puerto Rico, and the Virgin Islands; Arkansas voters, on November 4, 2008, approved a ballot question to legalize a state lottery.
The first modern interstate lottery in the U.S. was formed in 1985 and linked Maine, New Hampshire and Vermont. In 1988, the Multi-State Lottery Association (MUSL) was formed with Oregon, Iowa, Kansas, Rhode Island, West Virginia, Missouri, and the District of Columbia as its charter members; it is best known for its "Powerball" drawing, which is designed to build up very large jackpots. As of May 2010 the following states are part of Powerball: Arizona, Arkansas, Colorado, Connecticut, Delaware, D.C., Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virgin Islands, Virgina, Washington, West Virgina and Wisconsin. Another interstate lottery, The Big Game (now called Mega Millions), was formed in 1996 by the states of Georgia, Illinois, Massachusetts, Maryland, Michigan and Virginia as its charter members. These states were joined by New Jersey (1999), New York and Ohio (May 2002), Washington state (September 2002), Texas (2003) and California (2005) for a total of 12 members.[11]
Instant lottery tickets, also known as scratch cards, were first introduced in the 1970s and have since become a major source of state lottery revenue. Some states have introduced keno and video lottery terminals (slot machines in all but name).
Other interstate lotteries include Cashola, Hot Lotto and Wild Card 2, some of MUSL's other games.
With the advent of the Internet it became possible for people to play lottery-style games on-line, many times for free (the cost of the ticket being supplemented by merely seeing an ad or some other form of revenue). GTech Corporation, in the United States, administers 70% of the worldwide online and instant lottery business, according to its website. With online gaming rules generally prohibitive, "lottery" games face less scrutiny. This is leading to the increase in web sites offering lottery ticket purchasing services, charging premiums on base lottery prices. The legality of such services falls into question across many jurisdictions, especially throughout the United States, as the gambling laws related to lottery play generally have not kept pace with the spread of technology.
An evolution of the lottery on the internet has appeared on the social network Facebook. The free lottery has weekly drawings and allows people to receive daily lottery tickets and send their friends tickets.
Presently, large portions of many American state lotteries are used to fund public education systems.
[edit] Australia
Main article: Lotteries in Australia
In Australia, lotteries operators are licensed at a state or territory level, and include both state government-owned and private sector companies.[edit] Canada
In Canada prior to 1967 buying a ticket on the Irish Sweepstakes was illegal. In that year the federal Liberal government introduced a special law (an Omnibus Bill) intended to bring up-to-date a number of obsolete laws. Pierre Trudeau, the Minister of Justice at that time, sponsored the bill. On September 12, 1967, Mr. Trudeau announced that his government would insert an amendment concerning lotteries.Even while the Omnibus Bill was still being written, Montreal mayor Jean Drapeau, trying to recover some of the money spent on the World’s Fair and the new subway system, announced a "voluntary tax". For a $2.00 "donation" a player would be eligible to participate in a draw with a grand prize of $100 000. According to Drapeau, this "tax" was not a lottery for two reasons. The prizes were given out in the form of silver bars, not money, and the "competitors" chosen in a drawing would have to reply correctly to four questions about Montreal during a second draw. That competition would determine the value of the prize that the winner would win. The replies to the questions were printed on the back of the ticket and therefore the questions would not cause any undue problems. The inaugural draw was held on May 27, 1968.
There were debates in Ottawa and Quebec City about the legality of this 'voluntary tax'. The Minister of Justice alleged it was a lottery. Montreal’s mayor replied that it did not contravene the federal law. While everyone awaited the verdict, the monthly draws went off without a hitch. Players from all over Canada, the United States, Europe, and Asia participated.
On September 14, 1968 the Quebec Appeal Court declared Mayor Drapeau’s "voluntary tax" illegal. However, the municipal authorities did not give up the struggle; the Council announced in November that the City would appeal this decision to the Supreme Court.
As the debate over legalities continued, sales dropped significantly, because many people did not want to participate in anything illegal. Despite offers of new prizes the revenue continued to drop monthly, and by the nineteenth and final draw, was only a little over $800 000.
On December 23, 1969 an amendment was made to the Canada's Criminal Code, allowing a provincial government to legally operate lottery systems.
The first provincial lottery in Canada was Quebec's Inter-Loto in 1970. Other provinces and regions introduced their own lotteries through the 1970s, and the federal government ran Loto Canada (originally the Olympic Lottery) for several years starting in the late 1970s to help recoup the expenses of the 1976 Summer Olympics. Lottery wins are generally not subject to Canadian tax, but may be taxable in other jurisdictions, depending on the residency of the winner.[5]
Today, Canada has two nation-wide lotteries: Lotto 6/49 and Lotto Max (the latter replaced Lotto Super 7 in September 2009). These games are administered by the Interprovincial Lottery Corporation, which is a consortium of the five regional lottery commissions, all of which are owned by their respective provincial and territorial governments:
- Atlantic Lottery Corporation (New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador)
- Loto-Québec (Quebec)
- Ontario Lottery and Gaming Corporation (Ontario)
- Western Canada Lottery Corporation (Manitoba, Saskatchewan, Alberta, Yukon Territory, Northwest Territories, Nunavut)
- British Columbia Lottery Corporation (British Columbia)
[edit] France
The first known lottery in France was created by King Francis I in or around 1505. After that first attempt, lotteries were forbidden for two centuries. They reappeared at the end of the 17th century, as a "public lottery" for the Paris municipality (called Loterie de L'Hotel de Ville) and as "private" ones for religious orders, mostly for nuns in convents.Lotteries quickly became one of the most important resources for religious congregations in the 18th century, and helped to build or rebuild about 15 churches in Paris, including St. Sulpice and Le Panthéon. At the beginning of the century, the King avoided having to fund religious orders by giving them the right to run lotteries, but the amounts generated became so large that the second part of the century turned into a struggle between the monarchy and the Church for control of the lotteries. In 1774, the monarchy—specifically Madame de Pompadour--founded the Loterie de L'École Militaire to buy what is called today the Champ de Mars in Paris, and build a military academy that Napoleon Bonaparte would later attend; they also banned all other lotteries, with 3 or 4 minor exceptions. This lottery became known a few years later as the Loterie Royale de France. Just before the French Revolution in 1789, the revenues from La Lotterie Royale de France were equivalent to between 5 and 7% of total French revenues.
Throughout the 18th century, philosophers like Voltaire as well as some bishops complained that lotteries exploit the poor. This subject has generated much oral and written debate over the morality of the lottery. All lotteries (including state lotteries) were frowned upon by idealists of the French Revolution, who viewed them as a method used by the rich for cheating the poor out of their wages.
The Lottery reappeared again in 1936, called lotto, when socialists needed to increase state revenue. Since that time, La Française des Jeux (government owned) has had a monopoly on most of the games in France, including the lotteries. There have also been reports of lotteries regarding the mass guillotine executions in France. It has been said that a number was attached to the head of each person to be executed and then after all the executions, the executioner would pull out one head and the people with the number that matched the one on the head were awarded prizes (usually small ones); each number was 3-to-5 digits long.
[edit] Liechtenstein
Main article: International Lottery in Liechtenstein Foundation
The International Lottery in Liechtenstein Foundation (ILLF) is a government authorised and state controlled charitable foundation that operates Internet lotteries. The ILLF pioneered Internet gaming, having launched the web’s first online lottery, PLUS Lotto, in 1995 and processed the first online gaming transaction ever. The International Lottery in Liechtenstein Foundation (ILLF) also introduced the first instant scratchcard games on the Internet during this time. The ILLF supports a wide range of charitable projects and organisations internationally and in Liechtenstein.The ILLF operates many websites, referred to as the ILLF brands. Combined, these brands offer a wide array of games to choose from.
Lottery winnings are not taxed in Liechtenstein.
[edit] New Zealand
Main article: New Zealand Lotteries Commission
Lotteries in New Zealand are controlled by the Government. A state owned trading organisation, the New Zealand Lotteries Commission, operates low prize scratch ticket games and Powerball type lotteries with weekly prize jackpots. Lottery profits are distributed by the New Zealand Lottery Grants Board directly to charities and community organisations. Sport and Recreation New Zealand, Creative New Zealand and the New Zealand Film Commission are statutory bodies that operate autonomously in distributing their allocations from the Lottery Grants Board.The lotteries are drawn on Saturday and Wednesday. Lotto is sold via a network of computer terminals in shopping centers across the nation. The Lotto game was first played in 1987 and replaced New Zealand's original national lotteries, the Art Union and Golden Kiwi. Lotto is a pick 6 from 40 numbers game. The odds of winning the first division prize of around NZ$300,000 to NZ$2 million are 1 in 3,838,380.
The Powerball game is the standard pick 6 from 40 Lotto numbers with an additional pick 1 from 10 Powerball number. This game has odds of 1 in 38,383,800 and a first prize of between NZ$1 million and NZ$30 million.[6] In 2007 Powerball changed to a pick 1 of 10 game (formerly pick 1 of 8) and the minimum Powerball prize increased from $1 million to $2 million. Big Wednesday is a game played by picking 6 numbers from 45 plus heads or tails from a coin toss. A jackpot cash prize of NZ$1 million to NZ$15 million is supplemented with product prizes such as Porsche and Aston Martin cars, boats, holiday homes and luxury travel. The odds of winning first prize are 1 in 16,290,120.
Website operators independent of the state Lotteries Commission[7] began publishing online Lotto results[8] as early as 1998.[9] An interactive Lotto website authorised to sell tickets online was established in 2007.
Lottery winnings are not taxed in New Zealand.
[edit] United States
Main article: Lotteries in the United States
In the United States, the existence of lotteries is subject to the laws of each state; there is no national lottery.
Before the advent of state-sponsored lotteries, many illegal lotteries thrived; for example, see Numbers game and Peter H. Matthews. The first modern state lottery in the U.S. was established in the state of New Hampshire in 1964; as of 2008, lotteries are established in 42 states, the District of Columbia, Puerto Rico, and the Virgin Islands; Arkansas voters, on November 4, 2008, approved a ballot question to legalize a state lottery.
The first modern interstate lottery in the U.S. was formed in 1985 and linked Maine, New Hampshire and Vermont. In 1988, the Multi-State Lottery Association (MUSL) was formed with Oregon, Iowa, Kansas, Rhode Island, West Virginia, Missouri, and the District of Columbia as its charter members; it is best known for its "Powerball" drawing, which is designed to build up very large jackpots. As of May 2010 the following states are part of Powerball: Arizona, Arkansas, Colorado, Connecticut, Delaware, D.C., Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virgin Islands, Virgina, Washington, West Virgina and Wisconsin. Another interstate lottery, The Big Game (now called Mega Millions), was formed in 1996 by the states of Georgia, Illinois, Massachusetts, Maryland, Michigan and Virginia as its charter members. These states were joined by New Jersey (1999), New York and Ohio (May 2002), Washington state (September 2002), Texas (2003) and California (2005) for a total of 12 members.[11]
Instant lottery tickets, also known as scratch cards, were first introduced in the 1970s and have since become a major source of state lottery revenue. Some states have introduced keno and video lottery terminals (slot machines in all but name).
Other interstate lotteries include Cashola, Hot Lotto and Wild Card 2, some of MUSL's other games.
With the advent of the Internet it became possible for people to play lottery-style games on-line, many times for free (the cost of the ticket being supplemented by merely seeing an ad or some other form of revenue). GTech Corporation, in the United States, administers 70% of the worldwide online and instant lottery business, according to its website. With online gaming rules generally prohibitive, "lottery" games face less scrutiny. This is leading to the increase in web sites offering lottery ticket purchasing services, charging premiums on base lottery prices. The legality of such services falls into question across many jurisdictions, especially throughout the United States, as the gambling laws related to lottery play generally have not kept pace with the spread of technology.
An evolution of the lottery on the internet has appeared on the social network Facebook. The free lottery has weekly drawings and allows people to receive daily lottery tickets and send their friends tickets.
Presently, large portions of many American state lotteries are used to fund public education systems.
Countries with a national lottery
Africa
A modern Finnish Lotto coupon, with personal info (customer no. and account for winnings) blanked out. These coupons are printed out on a terminal connected to the lottery provider (a monopoly, Veikkaus) whenever a player participates in the lottery.
Kenya: Toto 6/49, Kenya Charity Sweepstakes
South Africa: South African National Lottery
[edit] North and South America
Argentina: Quiniela, Loto and various others
Barbados: Barbados lottery and various others
Bolivia: Lotería Nacional de Beneficencia y Salubridad
Canada: Lotto 6/49 and Lotto Max
Chile: Polla Chilena de Beneficencia S.A.
Costa Rica: Lotería Nacional, Chances Lotería Popular, Lotería Tiempos, and Lotería Instantanea (better known as "Raspaditas" since the tickets are scratch cards).
Dominican Republic: Lotería Electrónica Internacional Dominicana S.A.
Ecuador: Lotería Nacional
El Salvador: Lotería Nacional de Beneficencia, Lotín (scratch cards).
Honduras: Loterías Electronicas de Honduras S.A.
Mexico: Lotería Nacional para la Asistencia Pública and Pronósticos para la Asistencia Pública
[edit] Asia
China: China Welfare Lottery, China Sports Lottery
Hong Kong: Mark Six
Israel: Lotto
Japan: Takarakuji (宝くじ)
Lebanon: La Libanaise des Jeux
Macau: Macau SLOT
Malaysia: A wide variety of lotteries.
Singapore: Singapore Pools
South Korea: Lotto (also called 'Bok-Kwon' or 복권)
Sri Lanka: National Lottery, Development Lottery
Taiwan: Taiwan Lottery
Thailand: สลากกินแบ่งรัฐบาล (salak gin bang ratthabarn or "Government Lottery"), also called lottery or หวย (huay).
Vietnam: Xổ số kiến thiết
[edit] Australasia
Australia: OZ Lotto, Powerball, Lotto
New Zealand: NZ Lotteries
[edit] Europe
Pan-European: EuroMillions
Nordic countries: Viking Lotto
Austria: Lotto 6 aus 45, EuroMillions and Zahlenlotto
Belgium: Loterie Nationale or Nationale Loterij and EuroMillions
Bulgaria: Durzhavna lotariya, TOTO 2 (6/49, 6/42, 5/35)
Croatia: Hrvatska lutrija
Czech Republic: Sazka
Denmark: Lotto, Klasselotteriet
Greece: OPAP (Greek: ΟΠΑΠ – Οργανισμός Προγνωστικών Αγώνων Ποδοσφαίρου), Lotto 6/49, Joker 5/45 + 1/20 and various others
Hungary: Lottó (5/90 6/45 and 7/35)
Iceland: Lottó
Latvia: Latloto 5/35, SuperBingo, Keno
Liechtenstein: International Lottery in Liechtenstein Foundation
Luxembourg: EuroMillions
Malta: Super 5 and Lotto
Macedonia: Lotarija na Makedonija
Montenegro: Lutrija Crne Gore
Norway: Lotto
Poland: Lotto
Romania: Loteria Română (6/49, 5/40, Joker)
Russia: Gosloto (Russian: Гослото, The State Lottery)
Republika Srpska: Lutrija Republike Srpske
Serbia: Državna Lutrija Srbije (The State Lottery of Serbia)
Slovakia: Loto
Slovenia: Loterija Slovenije
Catalonia: Loteria de Catalunya (6/49 amongst others)
Sweden: Lotto (Svenska Spel)
Switzerland: Swiss Lotto and EuroMillions
Turkey: Various games by the National Lottery Administration under the name of Loto Türkiye including Loto 6/49 and jackpots
Ukraine: Ukrayinska Natsionalna Lotereya (Ukrainian: Українська Нацiональна Лотерея, Ukrainian National Lottery)
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