Development of lottery games
9. The introduction of a state lottery in New Hampshire,
in 1964, established the model for modern public lotteries in
the United States.
State lotteries are regulated by state governments, which operate,
and are sole beneficiaries of, the lottery. Federal regulation
of lotteries in the United States is limited to a prohibition
on inter-state advertising and selling of lottery tickets. The
New Hampshire State Lottery was launched with a passive draw,
which was essentially a raffle, in which players could not choose
their own numbers.
Technological innovations have enabled lotteries in the United
States to develop. The first such innovation, in the early 1970s,
was Instants, in which the player scratches off a latex panel
on a paper ticket to reveal numbers or words that show whether
the ticket is a winning one. The game offered immediate gratification,
and usually an instant cash payout of prize money. New ticket
designs are regularly introduced to maintain player interest.
Instants tickets are popular with operators because they can be
sold easily in vending machines.
10. The second innovation was a computerised imitation
of the illegal daily numbers games that had been popular in many
cities. This game allowed players to choose their own three- or
four-digit numbers, which were recorded online through a terminal
and logged through a communications network on the lottery's main
In the early 1980s, the numbers games spawned Lotto, the game
most closely associated with state lotteries. Lotto also allowed
players to select their own numbers, which were registered online.
The United Kingdom National Lottery is an online Lotto game in
which players select six numbers from a matrix of 49 (6/49). Lotto
games have numerous permutations of numbers selected and matrix
size, which affect the odds of the game. However, it should not
be forgotten that when comparing game designs and the size of
matrix with lotteries in the United States the picture is complicated
because players there are able to buy tickets in neighbouring
11. Lotto games are usually "parimutuel",
in that the game design has a prize structure based on predetermined
proportions of the prize fund. A non-parimutuel game guarantees
a set prize irrespective of the number of tickets sold. The prizes
for matching four or more numbers on the United Kingdom National
Lottery are parimutuel, but the prize for matching three numbers
is now set at £10. The United Kingdom National Lottery also
includes Thunderball, which has fixed, rather than parimutuel,
prizes, and Lottery Extra which is a parimutuel jackpot-only game.
12. Another game introduced in the United States
was an electronic version of Keno, which was originally a casino
game but is now typically played in bars, bowling alleys and diners.
Similarly to Lotto, but with much more frequent draws, its players
decide how many numbers to select from a large matrix, and that
selection is registered online. The Keno format varies between
States. In Maryland, it is played using a matrix of numbers from
1 to 80. The player selects up to 10 numbers from that matrix.
The lottery computer chooses 20 winning numbers from 1 to 80 every
five minutes, and the numbers are displayed on the Keno terminal
13. The most recent and controversial innovation
is electronic gambling through video lottery terminals (VLTs),
which can be programmed to carry a wide variety of games such
as video poker. Like conventional slot machines, they offer players
the chance to play a game and receive immediate payouts of winnings.
The near immediate gratification of "fast" games, such
as Instants, Keno and VLTs, has led to their description as "harder"
gambling, as opposed to the "softer" Lotto games that
are usually drawn only twice a week.
25 Laws relating to Lotteries,
Second Report from the Select Committee with Appendix, 1808 (323)
Vol II pp 11-12 republished in British Parliamentary Papers IUP
series: Social Problems-Gambling (2): Reports from Select Committees
... 1808-98, pp 19-20.