Lottery mania, or why we love games of chance

Lottery as a game of chance originated in ancient Rome where Nero distributed thousands of tickets to the public for prizes, including slaves, real estate and ships. The Holy Roman Empire spread lotto fever throughout Europe. French, Dutch and Spanish lotteries have been going strong for hundreds of years.

It could be said that America was born to play lotto. George Washington used it to fund the Revolutionary War and Thomas Jefferson did likewise for public works projects. From 1790 until the Civil War, lottery proceeds helped build more than 300 schools, 50 colleges (including Harvard, Yale and Princeton) and 200 churches.

The Louisiana Lottery, one of the most successful of its day, became so popular that the Pony Express ran tickets all over the young country. But widespread fraud and corruption prompted Congress to ban private lotteries in 1813. One hundred fifty-one years later, New Hampshire became the first state to lift the ban, authorizing a state lottery to support public education. New York and New Jersey soon followed.

The advent of high-speed computing helped win back public confidence and spread lotto fever in the 1980s. Today, 38 states sponsor lotteries, with a portion of the net profit going toward various government programs. According to NASPL, lotteries have raised nearly $200 billion for state governments since 1964.

Georgia lotto money underwrites college educations for good students; in Massachusetts, it offsets local property taxes. But some states still ban lotteries, primarily on moral or religious grounds. Others, such as Tennessee, Alabama and North Carolina, are reconsidering.

"The state of Utah may never have a lottery," says Vincent. "But many jurisdictions that previously expressed reservations about them are seeing the impact they have. As their neighboring states adopt new lotteries, such as Georgia with its college education for kids, that's a very attractive inducement."

'Stakes get swept away
Just as fortune has smiled on the American lottery market, it has virtually abandoned sweepstakes in the wake of recent multimillion-dollar class-action lawsuits alleging deceptive practices. Magazine giant PCH was ordered to pay $34 million and has changed its approach. American Family Publishers, a $1.5 million loser, declared bankruptcy.

You've probably noticed the lack of entry forms in your daily mail since the Deceptive Mail Prevention and Enforcement Law went into effect in April 2000. This law gives the U.S. Postal Service greater power to crack down on unscrupulous sweepstakes operators.

According to MarketRelevance, a promotion-tracking database, the number of magazines that include sweepstakes as part of their advertising campaigns fell from 7 percent in 2000 to 1 percent this year. Since traditional sweeps promoter Reader's Digest dropped sweeps altogether, Family Circle is the only major magazine publisher still employing the technique.

The chill has also affected fundraisers, the other major sweepstakes users.

"When publishing got a lot of litigation, fund-raisers didn't want to go near [sweepstakes]," says Glenn Lalich, research manager for direct response firm ParadyszMatera. "One thing feeds another and pretty soon people stopped doing them, so the names start dwindling. You mail sweeps packages to sweeps names; it's harder to convert someone who has never responded to sweeps before and it's generally not profitable."

Lalich says that although sweepstakes have withered on the publishing side, "smaller amount sweeps, say $20,000, still do well in the fund-raising area for select organizations."

"On the publishing side, we still see a trickle. It's always interesting when we see, say, a Family Circle. It's a bit of nostalgia. It's not completely disappeared, but the number of campaigns using sweepstakes has dropped dramatically. It's never gone through a cycle like this."

Jay MacDonald is a contributing editor based in Mississippi.