The Louisiana Lottery Company: A Nineteenth-Century “Golden Octopus”

With last week’s unprecedented two-billion-dollar Powerball lottery in the books after an eager audience around the U.S. watched as a winning number belonging to a California ticket holder made lottery history, let’s now look back in time at an early attempt at a nationwide lottery: The Louisiana Lottery Company. The Louisiana Lottery Company (not to be confused with the present-day Louisiana Lottery Corporation) has been largely forgotten, which is perhaps lucky for last week’s two-billion-dollar winner. The Louisiana Lottery Company, which for a time was the nation’s only legal lottery, became so corrupt and powerful that once it was shut down by the end of 1893, the idea of bringing back a legal lottery was unthinkable for decades to many Louisianans and Americans.

The Radical Republicans, in power during Reconstruction in Louisiana’s state legislature, were open to the idea of a legal lottery because they were desperate for a way to get money in the state budget following the Civil War without raising taxes. Charles Howard, a former agent for the Kentucky Lottery offered Louisiana Governor Henry Clay Warmoth a $40,000 annual payment for the state treasury in exchange for the exclusive right to operate a lottery in Louisiana for 25 years. On Dec. 3, 1868, the Louisiana Lottery company opened in a former New Orleans bank.

The drawings were held daily, monthly, weekly, or semiannually, with the largest case prize of $600,000 (close to twenty million dollars in today’s money) for the semiannual lottery. Tickets could be purchased through the mail, allowing the lottery to become popular throughout the country. If you could attend the drawing in New Orleans, though, you’d be rewarded with some of the most elaborate spectacle around. Popular ex-Confederate generals, Jubal Early and P.G.T. Beauregard were hired at today’s equivalent of $200,000 a year to add celebrity and an air of honesty as on-stage supervisors of the drawing. (Their signatures also appeared on the back of the tickets testifying to how “honestly, fairly, and in in good faith” the operation would be conducted.) Blind-folded young boys removed the winning ticket from the drum, and would hand the capsules they pulled to the generals. Young ladies dressed in hoop skirts posted the numbers on a large board for the audience to see.

Lottery officials made a showing of their civic mindedness too. Whenever the Mississippi River broke through a levee, the lottery company had its own ship that could deliver men and materials to repair the break and distribute food and money to flood victims. When there were outbreaks of yellow fever, the company would pay to employ people to collect and bury the bodies.

The state, for its part, required no licenses or fees, no audits of the books, and no taxes on the company’s earnings. Without audits, the amount of profit is not recorded but estimates are that ticket sales in the 1880s amounted to nearly 23 million dollars and the Louisiana Lottery Company got nearly 43 percent of that. In addition to these earnings, all the unsold tickets went into the hopper too, meaning frequently enough, the holder of a winning ticket for the Louisiana Lottery was the Louisiana Lottery Company! With a 25-year charter, a trail of bribed politicians, judges, newspapers and banks, and no oversight, the Louisiana Lottery could operate just as it wanted. Some historians call the Louisiana Lottery Company, of the 19th century one of the two most corrupt of enterprises in modern history (the other being the Juan Perón rule of Argentina).

However, where’s the corruption, there eventually come folks trying to reform or eradicate it. At first, the Louisiana Lottery Company had little to fear because the Louisiana State Treasurer Edward A. Burke protected it. But when the State Treasurer himself was implicated in the lottery’s corruption, he fled Louisiana for Honduras with one million dollars of State money. It was perhaps the single largest case of

political corruption in Louisiana. (Burke was convicted of embezzlement but never returned to Louisiana to stand trial. He stayed in Honduras and became an important political figure there.)

In Bellevue, then the Parish seat of Bossier an Anti- Lottery League chapter was formed on May 30, 1890, in a meeting held at the courthouse. Col. J. A. Snider (an attorney and former state representative) was selected as chairman and B.A. Kelly selected as secretary. A committee prepared and presented their resolutions, which included: Lotteries are morally wrong and politically a curse; We prize above all the honor of our State; We oppose the re-charter of the Louisiana Lottery Company: We form ourselves as a League and pledge to use all means to prevent the continuance of lotteries in the state; As citizens of faith and as patriots, members of the Democratic party, and fathers and mothers, we unite to “rid the State of a moral and political evil and to destroy a monster which seeks to purchase a State for its own pecuniary project and to make a people its thralls, morally and politically.”

Because it could extend its ‘tentacles’ and reach into every American home using the U.S Postal Service, the Louisiana Lottery Company earned the name the "Golden Octopus". However, this use of the U.S. Postal Service is also what aided in its dismantling. In 1890, the U.S. Congress banned interstate transportation of lottery tickets and advertisements, targeting 90% of the company's revenue. The U.S. Supreme Court upheld this statute in 1892. In March of that year the Louisiana constitutional amendment to renew the charter passed the State legislature, but it was defeated when it did not get the required voter approval. Voters also elected an anti-lottery candidate for Governor, Murphy J. Foster and a majority of anti-lottery legislators. During that year all lottery operations were banned, and the Louisiana Lottery Company’s charter expired in December, 1893.

If your family has any local stories to tell or photos to share, please visit us at the Bossier Parish Libraries History Center and let us know. We are located at 2206 Beckett St, Bossier City, LA and are open M-Th 9-8, Fri 9-6, and Sat 9-5. Our phone number is (318) 746-7717 and our email is history-center@bossierlibrary.org

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Article by: Pam Carlisle

Photos: Louisiana Lottery Company ticket for February 11, 1890, front and back. Note the signatures of Confederate Generals Jubal Early and P.G.T. Beauregard on the back.

Hon. J.A. (Jacob Adrian) Snider of Bellevue, Bossier Parish. Portrait is from the directory of the Louisiana Constitutional Convention of 1898:  “The Convention of '98 : a complete work on the greatest political event in Louisiana's history, and a sketch of the men who composed it”