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The first signs of a lottery trace back the Han Dynasty between 205 and 187 B.C., where ancient Keno slips were discovered. The lottery has helped finance major governmental projects like the Great Wall of China. From the Chinese “The Book of Songs” (second millennium B.C.) comes a reference to a game of chance as “the drawing of wood”, which in context appears to describe the drawing of lots. From the Celtic era, the Cornish words “teulet pren” translates into “to throw wood” and means “to draw lots”. The Iliad by Homer refers to lots being placed into Agamemon’s helmet to determine who would fight Hector.The first known European lottery occurred during the Roman Empire, and was mainly done as a form of amusement at dinner parties. Each guest would receive a ticket, and prizes would often consist of fancy items such as dinnerware. Every ticket holder would be assured of winning something. This type of lottery however, was no more than the distribution of gifts by wealthy noblemen during the Saturnalian revelries. The earliest records of a lottery offering tickets for sale is the lottery organized by Roman Emperor Augustus Caesar. The funds were for repairs to the City of Rome, and the winners were given prizes in the form of articles of unequal value.

The earliest public lottery on record is that which was held in the Dutch town of Sluis in 1434.

The first recorded lotteries to offer tickets for sale with prizes in the form of money were held in the Low Countries during the period 1443–1449. Various towns in Flanders (parts of Belgium, Holland, and France), held public lotteries to raise money for town fortifications, and raising money to help the poor. The town records of Ghent, Utrecht, and Bruges, indicate that the lotteries may well be of even greater antiquity. An early record dated May 9,1445 at L’Ecluse, refers to raising funds to build walls and town fortifications, with a lottery of 4,304 tickets and total prize money of 1737 florins.[1] In the seventeenth century it was quite normal in The Netherlands to organize lotteries in order to collect money for the poor. Tickets cost about four guilders and the prizes were paintings (50 to 100 per lottery); some of these the paintings were produced by nowadays famous painters as Jan van Goyen.

The Dutch were the first to shift the lottery to solely money prizes and base prizes on odds (roughly about 1 in 4 tickets winning a prize). The lottery proved to be very popular, and was hailed as a painless form of taxation. In the Netherlands the lottery was used to raise money for e.g. supporting poor people, building dikes, construction of defense works for towns and to buy free sailors from slavery in the Arab countries. The English word lottery stems from the Dutch word loterij, which is derived from the Dutch noun lot meaning fate. The Dutch state owned staatsloterij is the oldest still existing lottery.

Source: Lottery - Early history