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Once Banned, Lotteries are Big Money for US States

A customer is handed a Powerball ticket in Omaha, Neb., Aug. 23, 2017. Lottery officials said the grand prize for Wednesday night's drawing has reached $700 million. The second-largest on record for any U.S. lottery game.

A lottery player in the U.S. state of Massachusetts won the $759 million Powerball jackpot Wednesday night, the second highest in the game’s history and an amount that prompted millions of Americans to buy tickets in hopes they would have the lucky numbers.

The odds of winning the top prize were 1-in-292 million. Last year, three winners split the record $1.6 billion Powerball jackpot. Early Thursday, Charlie McIntyre, Powerball Product Group chairman, said the $758.7 million jackpot is the largest grand prize won by a single lottery ticket in U.S. history.

And yet, legalized lotteries are a relatively new phenomenon in the United States.

Colonists ran lotteries

Early colonists operated lotteries, and Roger Dunstan, who wrote the book History of Gambling in the United States, said the Jamestown colonists operated lotteries to fund the colony.

But the Massachusetts Bay Colony, founded by Puritans, banned lotteries and other forms of gambling, even at home.

In the end, the lure of easy money was too much and eventually, each of the 13 original colonies operated lotteries to provide funding.

Money from lotteries was used to fund schools and infrastructure, which is similar to what the revenues are used for today.

But it wasn’t smooth sailing for state lotteries. As scandals and evangelical disapproval of gambling mounted, states began banning lotteries as early as 1844. By 1890, only Delaware and Louisiana had lotteries.

Lotteries make a comeback

The pendulum started to swing back when Puerto Rico instituted a lottery in 1934. Thirty years later, New Hampshire followed suit.

Now, nearly every state, with the exception of Alaska, Hawaii, Mississippi, Nevada, Utah and Alabama, has a state lottery.

Today, most of the big-prize lotteries are operated across many states. Powerball and Mega Millions are the biggest joint-state lotteries. They are both available in 44 states.

According to Reuters, lotteries raised $17.6 billion in 2009. Eleven states made more money off the lottery than they did from corporate income tax, Reuters said. Most of the revenue goes to public schools.