Americans rediscover the lottery every 30 to 70 years ``I'm projecting [that] by early in 1986, when half of the states are running lotteries, you'll have revenues of $12 billion a year.'' Duane V. Burke, chairman and president, Public Gaming Research Institute

Lottery fervor is sweeping the United States. But that's really nothing new. American lotteries date back to the English settlement at Jamestown. In 1612, King James I permitted a lottery that garnered 29,000 pounds ``for the present plantation of English Colonies in Virginia.'' Since then, hundreds of lotteries have been used by churches, colleges, and governments to raise revenues.

Henry Chafetz, author of a book on the history of gambling (``Play the Devil''), says lotteries in America have been used for private greed as often as public good. And in the past, criminals have used lottery money to bribe governors and legislators, to corrupt newspapers, to control banks, and to suppress opposition with lavish payoffs.

Every 30 to 70 years, Americans rediscover high-stakes lottery gambling and pour tremendous amounts of money into it. This enthusiasm doesn't usually last very long, however. People eventually tire of lotteries, just as they got bored with hoola-hoops and yo-yos. Lottery income hits a peak, then begins a sharp decline.

Today's lottery craze, in some ways, is mild compared with earlier days.

Back in the 1860s, for example, there was the Havana Lottery, which had Americans all aflutter with excitement. People in New Orleans were so worked up about the Havana Lottery that they bought as many tickets as Cubans did. Every month, carrier pigeons were used to fly a list of the winners from Havana to New Orleans for the eager bettors along the banks of the Mississippi.

That lottery excitement, however, was no greater than in the 1820s and 1830s, when Americans along the Eastern Seaboard went gaga over state-run lotteries. In 1831, $53 million -- a huge sum at that time -- was bet in state lotteries in New York, Rhode Island, Connecticut, Maryland, Virginia, Pennsylvania, Delaware, and North Carolina. Eventually those lotteries died when corruption was uncovered among public officials and lottery operators.

Looking at the newest wave of lotteries, some experts say, ``This, too, shall pass.''

That may be. But there are differences. Today's operators are scrupulously careful to protect their lotteries from the slightest whiff of corruption. They are run in the open, and, so far, lotteries have been squeaky clean in most (but not all) states.

Today's operators all vividly remember the details of the last big American lottery -- a lottery so awful, so corrupt, so outlandish, that it took 70 years for people to forget it and give lotteries another chance. That was the notorious Louisiana Lottery, which became a national disgrace and triggered new federal laws to stop it.

The Louisiana Lottery got its start in 1869 because the states needed money -- much as they do today. The Southern states, in the wake of the Civil War, were destitute. Today, because of Reagan administration cutbacks, states again complain they need funds. In 1869 and in 1985 the answer was seen as gambling.

At first, the Louisiana Lottery sold tickets only within the state. But within a few years, tickets were available in every state and territory. There were daily drawings (as in major lotteries today) as well as ``grand extraordinary'' ones every six months. These extraordinary ones attracted as much national attention as the Kentucky Derby, Mr. Chafetz notes.

To protect its image, the Louisiana Lottery hired two Confederate war heroes, Gen. Pierre G. T. Beauregard and Gen. J. A. Early, to run the drawings.

As a further public-relations gesture, large sums of lottery money were directed into ``good works,'' such as a hospital, a cemetery, a library, books, flood-prevention levees, and even a Confederate war memorial.

Eventually, 5 million people a year outside the state were buying tickets, and the lottery accounted for more than half the mail passing through the New Orleans Post Office.

All this collapsed about 1890, when the country learned of corruption that involved the lottery, including payoffs to politicians and publishers. Congress passed laws prohibiting the use of the mails to send lottery tickets, checks, or even newspapers with lottery results.

Today's lottery operators think they have learned from such experiences. Drawings are held on TV, in full view of the public. Records are kept on computers to prevent skimming of funds by operators, either for personal gain, or for nefarious purposes.

Operators also have learned how to build support for lotteries. In some states, lottery monies are set aside for the elderly, education, and other noble causes. That builds a constituency, a base of supporters who will fight to maintain the lottery.

In earlier centuries, lotteries were used to erect Stoughton Hall at Harvard College, and to raise funds for Dartmouth, Yale, William and Mary, Union, Columbia, Williams, and the University of North Carolina. In its early days, the Virginia Colony built roads, bridges, and hospitals with lottery money.

Even Federal City in the District of Columbia was built in part with proceeds from lotteries, with George Washington buying the first ticket in what was known as Federal Lottery No. 1 for $7 in 1793.

In a similar way, state governments today are becoming dependent upon lottery and other gambling funds. Only time will tell whether this is a shortsighted gamble by the states themselves.

Fourth of eight articles. Next: Women flock to lotteries.

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