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Lottery Ball Drawing Machine

Ball drawing machine used by the Wisconsin Lottery for Daily Pick 3 and Daily Pick 4 games, 1992-2000.
(Museum object #2001.83.16.1A-B)

How can politicians raise money for the ever-increasing costs of public services without extracting it from voters by continually raising taxes? One way is to convince citizens to provide the money voluntarily. This is the basic idea underpinning the Wisconsin state lottery, which began operation on September 14, 1988. In exchange for the excitement of playing and a slim chance of getting rich, ticket buyers cheerfully hand money into the state coffers. The Wisconsin Lottery used the lottery machine featured here to select the winning numbers in its Daily Pick 3 and Daily Pick 4 games between 1992 and 2000.

In both Pick 3 and Pick 4, the player selected the numbers she or he wished to play at sale sites located around the state and the tickets were issued by a terminal linked to a central lottery computer. Every day, lottery staff randomly drew numbered balls and awarded prizes for matching all or some of the numbers selected. This machine was made by the Gar-Ron Plastics Corp. of Baltimore, Maryland, and was purchased by the Wisconsin Lottery Board on October 10, 1989. It was put into service on September 21, 1992, when the Daily Pick 3 game debuted.

This machine is just one part of a multi-component system used to draw the winning lottery numbers. The complete system consists of 1) a control panel, with buttons to start each drawing machine, drop the balls, and select a winner; 2) a junction box, which relays instructions from the control panel to each of the drawing machines; and 3) either three or four drawing machines, depending on the game. Each drawing machine has an egg-shaped acrylic chamber mounted on a carpeted cabinet. The operator inserted numbered ping-pong balls through the tube at left, and a blower inside the cabinet circulated them. When tripped by the control panel, a compressor inside the cabinet opened a gate at the top of the center tube to select the winning ball.

Until 2003, television station WISN in Milwaukee broadcast live Wisconsin Lottery drawings from its studios under the supervision of accounting firm Conley McDonald & Co. Although the Pick 3 and Pick 4 games still exist, machines like this no longer physically choose winning numbers; computerized random number generators now do the job.

The creation of a state lottery was a reversal of more than a century of Wisconsin gambling history. Wisconsin's 1848 state constitution expressly outlawed lotteries of all kinds, both on moral grounds and because of the mismanagement and failure of several other state-sponsored lotteries of that time. For generations, Wisconsin enforced some of the most restrictive anti-gambling laws in the country, but in the late twentieth century a variety of factors came together to change that.

In 1963, New Hampshire – famous for its lack of income or sales taxes – established a state lottery, and within a decade, the rest of the Northeastern states had followed suit. In 1965, the Wisconsin legislature failed to pass a proposal creating a state lottery to fund education, but voters did approve a constitutional amendment allowing Wisconsin residents to participate in promotional giveaways and sweepstakes. This was the first of several small amendments which chipped away at the state's absolute ban on gambling. When Illinois created a state lottery in 1974, Wisconsin lottery proponents argued that potential state revenue was being siphoned away by the state's southern neighbor.

Additional bills to establish a state lottery followed soon thereafter, and while opponents were still uncomfortable with gambling's potentially addictive aspects and its generally regressive structure, they tended to view gambling less as an absolute sin and more as a social problem that could be managed. Meanwhile, popular frustration with rising property taxes grew into a nationwide phenomenon, leading to what is popularly called the "tax revolt" of the 1970s, led by California's Proposition 13, an initiative passed in 1978 that capped real estate taxes at 1% of the property's value.

As pressure to ease state property taxes rose, Wisconsin legislators eventually crafted a proposal that seemed to minimize the negative repercussions of state-sponsored gambling, while potentially generating significant new, non-tax, revenues. To help protect players, the proposed statute required at least 50% of lottery revenues to be paid out in prizes; required all informational advertising to include the odds of winning each prize; and prohibited the use of public funds for promotional advertising. By banning "promotional" advertising, the theory went, the state would not be enticing potentially vulnerable citizens to play. At the same time, people had to buy tickets for the lottery to generate significant revenue; hence, "informational" advertising (which might describe ticket prices and sales locations; prize structures; game types and playing procedures, etc.) was permitted.

To benefit taxpayers, administrative expenses were capped at 15% of revenues (lowered to 10% in 1997); and net proceeds were designated for property tax relief, rather than added to general revenues. Wisconsin voters passed an amendment allowing a state lottery by an almost 2-to-1 margin in April 1987.

The Wisconsin Lottery has changed significantly since its creation. Originally operated by a Lottery Board, it became a division of the Department of Revenue in 1995. To maintain player interest, the Lottery has routinely adopted new games and retired old ones. To counter lagging sales in the late 1990s, commissions and incentive payments to retailers were increased. In response to legal challenges, the courts have helped define the scope of the term "lottery," the legal mechanisms by which net revenues are returned to taxpayers, and which taxpayers benefit.

But some things have not changed. Many people still question the distinction between promotional and informational advertising, despite being established in law. More importantly, the mission to provide tax relief remains fundamental. Between its inception in September 1988 and June 30, 2008, the Wisconsin Lottery generated $8.8 billion in sales. It has returned 56.8%, or $5.0 billion, in prizes. After spending an additional 7% of gross revenues in administrative costs and 6% in commissions to Lottery retailers, the Wisconsin Lottery has returned $2.7 billion, or 30.7% of revenues, in tax credits to Wisconsin property owners.

[Sources: The Evolution of Legalized Gambling in Wisconsin (Wisconsin Legislative Reference Bureau, May 2000); Wisconsin Lottery, Department of Revenue: An Audit (Wisconsin Legislative Audit Bureau, May 2002); television video image courtesy of the Wisconsin Lottery with special thanks to Wisconsin Public Television for assistance in converting television image to a digital still image.]

DBD


Posted on September 11, 2008

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