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Throughout Louisiana history there have been many corrupt individuals and organizations, but few can match the shameless acts of the Louisiana Lottery Company.
When the Radical Republicans dominated Louisiana politics during Reconstruction, the legislature passed a charter bill in 1868 to allow Charles Howard’s Louisiana Lottery Company to operate for twenty-five years. The company was exempt from paying taxes, and its only obligation to the state was to donate $40,000 a year to the charity hospital.
Lottery drawings were held daily, monthly, and semi-annually, with the largest cash prize being $600,000 for the semi-annual drawing. The Louisiana lottery quickly became the most popular lottery in the United States, perhaps the world, largely because players could buy tickets through the mail.
Players’ tickets were placed in a giant hopper, and a winning ticket was pulled at random. Unfortunately for individual players, the company claimed all of the unsold tickets and put them into the hopper, as well. This ensured that the company often won its own game, and the board of directors split the winnings.
The Lottery Company wanted players to believe the game was fair, so it hired famous people to give the proceedings an air of legitimacy. For example, the popular former Confederate generals P. G. T. Beauregard and Jubal Early were paid $10,000 a year (equal to about $200,000 today) just to be present during the drawings.
The Louisiana Lottery Company earned nearly fifty percent profits on the approximately $30 million a year it took in and soon became the most powerful entity in Louisiana.
To maintain good public relations, Howard donated huge amounts of money to charities, the New Orleans fire department, schools, and to flood victims. His children later helped establish Tulane University’s Howard Memorial Library (today’s Howard-Tilton Memorial Library).
However, not everyone was impressed, and the Metairie Jockey Club refused to allow Howard to become a member. When the club’s racetrack later suffered financial difficulties, Howard bought it and converted it into Metairie Cemetery, where he was buried.
Over the years, the Lottery Company bribed politicians, judges, newspapers, and banks to win favors. Like an octopus, its tentacles reached into all aspects of the state government, and its corruption became one of Louisiana’s greatest political issues in the late nineteenth century.
Although the Republicans were driven from power at the end of Reconstruction, the lottery remained in operation under the provisions of its twenty-five-year charter. By 1878, it was the only lottery operating in the United States.
The following year the legislature passed a bill abolishing the Lottery Company, but the company won a state supreme court decision that allowed it to continue to operate for the fourteen years left in its charter. The company also bribed enough politicians to get a clause put into the Constitution of 1879 to extend the Lottery’s charter to 1895. Some pro-lottery legislators were accused of receiving $10,000 each for casting votes in favor of the company.
When state treasurer Edward A. Burke was implicated in the corruption, he suddenly fled to Honduras with more than one million dollars of state money. It was, perhaps, the single largest case of political corruption in Louisiana history. Although indicted for the embezzlement, Burke refused to return to Louisiana to face charges and used his ill-gotten fortune to become an important political figure in Honduras.
In 1888, Democrat Francis T. Nicholls was elected governor. He spent much of his term fighting the corrupt organization, but it took an act of Congress to help destroy the Lottery Company.
In 1890, while Nicholls was governor, Congress reacted to growing pressure to end the lottery’s stranglehold on the state. A federal law was passed forbidding the sale of lottery tickets through the mail and prohibiting lottery companies from advertising in the newspaper. Because ninety percent of the lottery’s money came from out-of-state players, this law had a devastating effect on the company.
Murphy J. Foster was elected governor in 1892, and he had the satisfaction of driving the lottery out of Louisiana. Foster had battled the Lottery Company for years and was successful in getting the legislature to pass a law forbidding the sale of lottery tickets in Louisiana or having a lottery drawing after December 31, 1893.
Having finally lost its base of support, the Louisiana Lottery Company left the state in December 1893 and moved to Honduras, where it continued to operate until 1895.
The Louisiana Lottery Company’s infamous dealings turned most Americans against such gambling, and there was not another American lottery for seventy years.
Dr. Terry L. Jones is a professor emeritus of history at the University of Louisiana at Monroe. For an autographed copy of “Louisiana Pastimes,” a collection of the author’s stories, send $25 to Louisiana Pastimes, P.O Box 1581, West Monroe, LA 71294.
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