Million Lottery
The Million Lottery or Million Adventure[1] was the first English state lottery and was launched by the government in 1694.
Purpose[edit]
The brainchild of speculator and Master of the Royal Mint Thomas Neale, the lottery was created in order to raise money for the Exchequer. 100,000 £10 tickets were offered for sale as one of a series of measures to raise revenue to allow English participation in the Nine Years' War against France. Other contemporary financial innovations included the granting of a royal charter to the Bank of England and the creation of the country's first national debt. Neale received 10% of the lottery's proceeds.[1]
The 'Bank on Tickets of the Million Adventure' or Million Bank was established in 1695 to manage the assets of subscribers.[2] In 1699 all other lotteries in England were banned but 42 further lotteries were run on the same basis until 1768.[3]
In an ostentatious demonstration of security, tickets for the lottery were kept in special chests with 18 locks. The tickets were also bonds and were redeemable over a 16-year period. In fact, the fund exhibited a shortfall almost immediately and could not keep up with repayments until 1698 when the war was over.[4]
Since each ticket sold at £10, and offered £1 per year for 16 years, plus a lottery reward, its annual interest rate is 10+x%, where x is random. In expectation, x = 1.5.[5] The tickets themselves remained a tradable commodity after the lottery draw (in November 1694), because each ticket still yielded £1 a year for 16 years. The price of a ticket fluctuated around £5-8 during 1694-1701.[6]
References[edit]
- ^ a b Levenson, Thomas (2010). Newton and the Counterfeiter. London: Faber & Faber. p. 194.
- ^ "C 46". The National Archives catalogue. Retrieved 7 September 2011.
- ^ "Lottery Office Records". The National Archives catalogue. Retrieved 7 September 2011.
- ^ Levenson, Thomas (2010). Newton and the Counterfeiter. London: Faber & Faber. p. 195.
- ^ Cohen, Jacob (1953). "The Element of Lottery in British Government Bonds, 1694-1919". Economica. 20 (79): 237–246. doi:10.2307/2551295. ISSN 0013-0427. JSTOR 2551295.
- ^ Murphy, Anne L. (October 2005). "Lotteries in the 1690s: Investment or Gamble?". Financial History Review. 12 (2): 227–246. doi:10.1017/S0968565005000119. hdl:2299/6283. ISSN 1474-0052. S2CID 154687748.