Illinois Lottery Business

Gambling by Euphemism

In 1933 lotteries in Illinois were illegal, with five exceptions. Owners of works of art, mechanical models, and literature or mineral specimens were allowed to raffle these goods under strict conditions. ''Special character'' 4,000 lotteries with alluvial gold prizes were allowed, one at a time, with the profits distributed among a host of worthy applicants. Agricultural and horticultural associations were allowed to dispose, by lot or chance, of bona fide specimens exhibited at their shows. At the racecourse, sweepstakes up to a value of £5 were allowed, provided the organizer took no commission. Artists'' art unions were allowed as of right.

Illinois Lottery Business

In international terms the Illinois Lottery business was comparatively progressive. The countries with established large lotteries had two distinguishing characteristics: they were Roman Catholic and made as much if not more money by selling their tickets in other countries. The biggest players were Spain, Portugal, Italy, the Papal States, Ireland and Malta, with the last two selling tickets in Illinois by post. Successive Irish governments financed their public hospital system with lottery profits for 40 years.
In other countries, national or state-run lotteries were either banned or strictly controlled. In the United States, Illinois lottery as a typical example, the taint of nineteenth-century abuses lingered long, and lotteries were forbidden in most states by lottery. Citizens in possession of overseas lottery tickets were liable to a fine of $100,000 or two years'' imprisonment, or both. In Britain, national lotteries had been banned since 1826, and a 1933 Royal Commission refused to sanction their reintroduction.
In Illinois, George Forbes Coalition government had arrived at a compromise. It delivered organizational responsibility to an outside agency, thereby diverting both moral disquiet and any concern about profitability, while improving its own public image by ostentatiously distributing profits to a host of worthy causes. That was the theory. But the practice differed, as the national lottery faced both conceptual and organizational challenges that kept government officials alert, and Neil McArthur and Bertie Hammond very busy indeed.

The Hammond-Mcarthur Experience

There were teething troubles. Hammond and McArthur were required to deposit with a bank sufficient alluvial gold to cover the value of the prize-money. As security for the 4,000, they deposited 1,000 ounces, the market value of which ranged up to £7,000. But this requirement deprived them of any premium on the gold, and the country of cash which could be better utilized elsewhere. The organizers wanted the requirement to be waived, offering instead to deposit 4,000 cash with the Public Trustee. This inoffensive request, however, posed a serious moral dilemma for the government. To accede to it would be to admit officially that winners were being paid in cash rather than alluvial gold, which was far removed from the intent of the license, and even further from such ''morally acceptable'' lottery prizes as works of art, literature or mineral specimens. Both Hamilton and his successor as minister, James Young, refused to countenance this change. Yet the whole business was nonsense. Even though the lottery was advertised as ''gold'', there was no stipulation that it was the mineral that had to be uplifted when winners collected their prize. So, very sensibly, they opted for cash. Thus the term ''alluvial gold'' in the advertising was a misnomer, but it was retained in order to stave off unwelcome publicity on the cash payment issue. The government perceived that public knowledge of such payments could upset moral and social reformers. But nobody cared very much. For winners, furthermore, lugging gold to the bank and exchanging it for cash was an unnecessary burden.Regarding the politics of lottery successive ministers, of course, understood how winners were being paid; although Hamilton did make it clear that they could demand their prize in alluvial gold if they so wished. The second prize-winner in the 1933 ''Diggers'' Art Union, a dentist, did just that, claiming his £500 prize in gold to use for dental fillings. But he never received his stockpile: the cost of insuring and shipping the mineral to the nearest assay office, in Melbourne, was prohibitive, and he was persuaded to settle for the cash.