The Louisiana State Lottery
Louisianans met the formidable task of reconstructing the southern states with a creative solution: a lottery. In response to Reconstruction-era demands and destruction, Louisiana tactfully used a lottery system to fund state reconstruction efforts. Many saw this as a necessary endeavor because of Louisiana’s devastated infrastructure after experiencing over twenty Civil War battles. However, this method quickly became controversial because of arguments over the lottery’s morality.
The Louisiana Assembly chartered the Louisiana State Lottery Company in 1868 and granted this company the sole right to sell and distribute lottery tickets in the state. In return, the Louisiana State Lottery Company had to deposit a quarterly $40,000 into the state treasury, totaling over $900,000 in contemporary dollars. Any money made above the deposit minimum was left to the company, without any taxes applied.
The lottery’s influence stretched beyond the state of Louisiana, demonstrating the lucrative opportunity the lottery presented, and consequently, the lottery’s potential to fund reconstruction efforts. The Louisiana State Lottery Company soon became one of the largest operating businesses in the United States, reaching over eight million dollars in net profit by 1890. Hopeful winners bought tickets nationwide for Louisiana’s lottery. In fact, Washington, D.C. sold the second highest amount of Louisiana State Lottery tickets.
Despite the company’s attempts to establish a positive and philanthropic image, anti-lottery legislation subverted these objectives. Almost immediately after the Louisiana State Lottery Company's conception, allegations of bribery and corruption emerged. These contentions were rooted in the company’s status as a monopoly which continuously attempted to influence state legislation. In an attempt to improve its reputation, the Louisiana State Lottery Company offered monetary and manpower relief for natural disasters. The company also generated revenue for newspapers that advertised for the company. The company even promoted positive press by hiring Confederate generals P.G.T. Beauregard and Jubal Early to preside over the lottery drawings and make statements combatting criticism toward the company.
Concurrently with the Louisiana State Lottery’s swelling popularity, Congress debated the processes surrounding mail in the United States. Congress banned mailing lottery tickets in 1876 in an effort to exert more control over the industry. An 1878 Supreme Court decision affirmed congressional power to regulate mail, but that the “sanctity of the seal” principle preserved privacy and security of mail. This decision stymied any anti-lottery legislative enforcement. These congressional debates went on for years.
Anti-lottery Republicans framed the issue in moral terms. They argued that the Louisiana Lottery wrongly promoted gambling, debt, and addiction. Pro-lottery Democrats argued that people should be free to make their own choices on the matter. In 1889, Republican President Benjamin Harrison requested anti-lottery legislation in his first message to Congress, and then reiterated this request in July of 1890. Soon after, on August 16, 1890, likely precipitated by President Harrison’s words of solidarity, the House of Representative passed introduced House Bill 11569—referred to as “the lottery bill”—which forbade mailing newspapers containing lottery advertisements. The “lottery bill,” augmented by a local New Orleans’ postmaster’s willingness to enforce it, caused a tremendous decrease in lottery revenue. In 1892, Louisiana soundly defeated a state constitutional amendment that attempted to recharter the Louisiana State Lottery Company.
The rise and fall of the Louisiana State Lottery Company illustrated one unconventional attempt to raise revenue in Reconstruction-era Louisiana.
“Congressional Record- House" By: GovInfo