An understanding of gaming and lottery businesses - Part I

A few weeks back newspapers reported the story of a British lady, a winner of a £10,000,000 lottery, who came to Africa to support an Ethiopian orphanage from the proceeds of her prize money; she even went further by promising to continue supporting people in need.

A few weeks back newspapers reported the story of a British lady, a winner of a £10,000,000 lottery, who came to Africa to support an Ethiopian orphanage from the proceeds of her prize money; she even went further by promising to continue supporting people in need.

I also heard of lottery winners here in Rwanda; one of whom won Rwf 10 million just before last Christmas. These fascinating gaming stories, with the huge amounts of money involved, changed people’s lives and brought the gaming business/lottery into the fore.

While some people have been fascinated with the business, others have believed that this industry was a swindle.

These mixed feelings have also been expressed by  many Rwandans because, as you might know, we have had different types of the lottery businesses since 1994. Some, like LKV failed, while others like Lotto Rwanda have stayed in business; this constant coming and going of lotteries have left people confused and sometimes disappointed.

The point of this article is to remove some of the confusion from the debate and make things clearer. This article will help explain the purpose, background, history and the ethical basis of the gaming business.

Some believe the lottery is valuable opportunity for building prosperity while other to people consider the entire industry evil and a threat people’s money and, therefore, their security.

Is the gaming business worth it? Can it be sustainable and profitable and in the public interest; or should we simply outlaw it in our country?

A lottery is a form of gambling which involves drawing lots for prizes. Some governments merely accept it, while others actively endorse it  to the extent of organizing a national lottery like Brazil, Canada, Austria, France, Denmark, Germany, Greece, Israel, Japan, Singapore, South Korea, just  to name few.

The world’s largest jackpot of $390 million was won by 2 people in the US states of New Jersey and Georgia, USA in March 2007.
The English word lottery is derived from the Dutch word loterij which stems from the Dutch noun lot meaning “fate”.

Throughout much of recorded history, lotteries have been used as a means of raising funding for public works and this continues up to today.

The presence of lottery games can be traced back as early as between 205 and 187 B.C. during the Han Dynasty in what is now China.

It is believed that the game Keno, a lottery-like game that is still currently played in modern day casinos, originated at the time. It is thought that even back then lotteries were used to finance government projects, including the famous, Great Wall of China.

The first known European lottery occurred during the Roman Empire. At first these lotteries were usually done simply as amusement at dinner parties for the nobility, however during the reign of Augustus Caesar there are records of the sale of tickets for a lottery in order to raise funds for repairs to the City of Rome.

However winners were given prizes in the form of articles of disparate value.

It wasn’t until 1434 that the earliest public lottery went on record - in the Dutch town of Sluis. And it wasn’t until at least a decade later that the first lotteries with prizes in the form of money began to appear in numerous towns in Flanders (present day Belgium, Holland, and France).

These first lotteries with monetary prizes were held to raise money to aid the poor and fund fortifications of the towns. These lotteries were hailed as a less painful form of taxation and were quite popular.

After the first English lottery approved by King James I in 1612 that granted the Virginia Company of London the right to raise money and therefore found the original settlement, lotteries in the colonies continued to be popular.

In fact lotteries played a significant role in the financing of building and improving the colonies. Records show that over 200 lotteries were permitted between 1744 and the American Revolution, these played a vital role in the funding of roads, libraries, churches, colleges, bridges, and other public works.

Princeton, Columbia University, and the University of Pennsylvania began by being financed by lotteries. Lotteries also played a part in supporting the war efforts during the French and Indian Wars and the American Revolution. Rare lottery tickets with George Washington’s signature can still be found and are worth about $15,000 today.

Alexander Hamilton wrote that Everybody...will be willing to hazard a trifling sum for the chance of considerable gain...and would prefer a small chance of winning a great deal to a great chance of winning little.” while the Continental Congress employed lotteries to aid in the war effort.

The lotteries were especially useful in raising funds as taxation was a sensitive issue among the colonists, unfortunately this practice also led to the belief that lotteries were are a form of hidden tax.

To be continued

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