Early America, 1612–1900

An English lottery, authorized by King James I in 1612, granted the Virginia Company of London the right to raise money to help establish settlers in the first permanent English colony at Jamestown, Virginia.
Lotteries in colonial America played a significant part in the financing of both private and public ventures. It has been recorded that more than 200 lotteries were sanctioned between 1744 and 1776, and played a major role in financing roads, libraries, churches, colleges, canals, bridges, etc.^[3] In the 1740s, the foundation of Princeton and Columbia Universities was financed by lotteries, as was the University of Pennsylvania by the Academy Lottery in 1755.
During the French and Indian Wars, several colonies used lotteries to help finance fortifications and their local militia. In May 1758, the State of Massachusetts raised money with a lottery for the "Expedition against Canada."

Massachusetts Lottery Ticket 1758 French & Indian Wars

Benjamin Franklin organized a lottery to raise money to purchase cannon for the defense of Philadelphia. Several of these lotteries offered prizes in the form of "Pieces of Eight." George Washington's Mountain Road Lottery in 1768 was unsuccessful. However, these rare lottery tickets bearing George Washington's signature have become collectors' items which sold for about $15,000 in 2007. Later, in 1769, Washington was a manager for Col. Bernard Moore's "Slave Lottery", which advertised land and slaves as prizes in the Virginia Gazette.

1776 Lottery ticket issued by Continental Congress to finance Revolutionary War.

At the outset of the Revolutionary War, the Continental Congress used lotteries to raise money to support the Colonial Army. Alexander Hamilton wrote that lotteries should be kept simple, and that "Everybody ... will be willing to hazard a trifling sum for the chance of considerable gain ... and would prefer a small chance of winning a great deal to a great chance of winning little." Taxes had never been accepted as a way to raise public funding for projects, and this led to the popular belief that lotteries were a form of hidden tax.
At the end of the Revolutionary War the various states had to resort to lotteries to raise funds for numerous public projects. For many years these lotteries were highly successful and contributed to the nation's rapid growth. The lotteries were used for such diverse projects as the Pennsylvania Schuylkill – Susquehanna Canal (lottery in May 1795), and Harvard College (lottery in March 1806). Many American churches raised building funds through state authorized private lotteries.

Harvard Lottery Ticket 1811

However, lotteries eventually became a cause of financial mismanagement and scandal. Most notorious was the Louisiana State Lottery (1868–1892) which was aptly called the "Golden Octopus" because its tentacles reached into every home in America.

Louisiana Lottery 1/20th of a $20 ticket: The Last of the Lotteries

Bolita, a type of lottery popular in Cuba, was brought to Tampa, Florida in the 1880s and flourished in Ybor City's many Latin saloons.
Toward the end of the 19th century a large majority of state constitutions banned lotteries. Finally, on July 29, 1890, U.S. President Benjamin Harrison sent a message to Congress demanding "severe and effective legislation" against lotteries. Congress acted swiftly, and banned the U.S. mails from carrying lottery tickets. The Supreme Court upheld the law in 1892, and that brought a complete halt to all lotteries in the United States by 1900.
When lotteries raised their head again in 1964, it would take many years of constitutional amendements by the various states before the lotteries were allowed to flourish again.
On March 12, 1964, New Hampshire became the first state to sell lottery tickets in the modern era.