In fact, some of the country's Founding Fathers supported using lottery funds, including George Washington who unsuccessfully attempted to raise funds for building Virginia's Mountain Road. Even Thomas Jefferson viewed lotteries as 'indispensable'. Benjamin Franklin unsuccessfully attempted to raise funds to buy a Revolutionary War cannon in Philadelphia.
John Hancock successfully financed Faneuil Hall's rebuilding in 1761. By 1832, 420 lottery games were held in eight states. It was lottery proceeds that funded college building construction at Yale and Harvard. In fact, Southern states financed Reconstruction with lotteries after the Civil War ended.
The notion of using lottery proceeds to fund government projects came from England. In the 1600s, England used lottery proceeds to finance the Jamestown colony.
The Supreme Court ruled in 1878 that the lottery games were demoralizing to American citizens, and Congress outlawed the use of mail to advertise lottery games. However, these actions haven't stopped most of the states in the U.S. from legalizing government-run lottery games.
In 1898, Louisiana Lottery Company (LLC) monopolized lotteries in the state of Louisiana, making more than $20 million in sales. More than 90 percent of LLC private lottery's funds were from outside Louisiana. Special trains transported thousands of receipts regularly to the company's New Orleans headquarters. Since the company's founder paid bribes, the business avoided taxes.
LLC earned 48 percent profit, even after the extensive bribes the company paid. By adding unsold tickets to the barrel where winning numbers were picked out of, the company often rigged the system to win its own prize money. President Benjamin Harrison denounced unscrupulous lottery agencies, and Congress banned moving lottery tickets across state lines or by mail. Louisiana's lottery's scandal-ridden system soured the national public's opinion of lotteries in general.