The first lottery in the United States took place in the 1760s when George Washington created it to fund the building of Mountain Road in Virginia. Its success attracted residents of neighboring states to purchase tickets. In the late fifteenth and sixteenth centuries, the lottery became more common in Europe. Its use as a funding mechanism for public projects was first associated with the United States in 1612, when King James I of England created a lottery to fund the rebuilding of Faneuil Hall in Boston. Since then, lottery funding has been used for public and private organizations to fund towns, wars, colleges, and public-works projects.
However, the numbers are not as rosy as you might think. In fact, lottery spending is higher in low-income and minority communities. A recent Chicago Reporter article examined lottery spending in Illinois by zip code. In fact, lottery players in zip codes with low incomes and minority populations spent the most on tickets, on average, than residents from wealthier neighborhoods. While the average lottery payout is 50%, African-Americans spent almost four times as much as white and college-educated residents.
Since 1970, the U.S. lottery has been operated by state governments, which are monopolies and don’t compete with commercial lotteries. Lottery profits are used to support various government programs and services. As of August 2004, forty states had lottery operations. In total, ninety percent of the U.S. population lived in a lottery state. At the time, this number reflected the fact that there were relatively few lottery outlets in high-income neighborhoods.