As the newest Mega Millions jackpot breaks the billion-dollar mark, Americans are once again flocking to corner markets in the hopes of hitting it rich. But most U.S. citizens could have nothing to do with the first modern American lottery, no matter how much they wanted to be involved, because it happened in the territory of Puerto Rico.
From the moment it became part of the imperial United States, a “trophy” for the victors of the Spanish-American War, Puerto Rico’s degree of self-governance has been a point of frustration for those who live on the island. Even last week, the U.S. Supreme Court considered the place of Puerto Rico’s sovereignty in international law and the House Committee of Natural Resources discussed the commonwealth’s pleas for debt relief. The story behind this first modern American lottery recalls an earlier time when Puerto Rico’s need for Congressional assistance went unanswered.
In 1934, Puerto Rico simmered with social unrest. Two hurricanes had hit the agricultural industry within four years, damaging coffee, tobacco and sugar production. Profits for existing exports dropped during the Great Depression, and by March of that year, relief workers told a visiting Eleanor Roosevelt that 82 percent of Puerto Ricans needed financial aid. (President Roosevelt extended New Deal programs to the island, but funds came slowly). The fledgling Nationalist movement, seeking independence for the people of Puerto Rico, strengthened amid worker strikes. Another threat loomed over the population’s physical health: the death rate from tuberculosis was alarming at five times that of reported cases in the United States. Upon visiting the slums in San Juan, Eleanor Roosevelt expressed outrage at the effect the disease was having on families. She hoped that “a plan can be made to end the slum conditions that are a menace to the general health.” Puerto Rican legislator Maria Luisa Arcelay had such a plan.
Arcelay had become the first woman elected to the legislature in 1932. A former teacher, she started her own needlework factory before her district of Mayaguez elected her to the House of Representatives of Puerto Rico. As a freshman representative still in her 30s, she took on the Catholic Church by pushing for a bill that would allow Puerto Rico’s health commission to operate birth control clinics. The following year, in 1934, Arcelay sponsored another scandalous bill: the return of the lottery after a 35-year absence. Monies earned, she said, would help fund the fight against tuberculosis. The bill passed in the Puerto Rican legislature, but the lottery wouldn’t become legal unless it had the approval of the island’s governor, a Spanish-American War veteran from Georgia. That same year, Roosevelt had appointed Blanton Winship, a 65-year-old former military aide to Calvin Coolidge and a Spanish-American War veteran from Georgia, to the position. As the Nationalist movement spread, Winship whipped the police into a military operation, best exemplified by the Ponce Massacre of 1937, when police treated a peaceful demonstration like a riot, assaulting more than 200 and killing 19.
The U.S. Congress had outlawed lotteries during the second Grover Cleveland administration with the Anti-Lottery Act of 1895, which included an interstate commerce ban on transporting any lottery materials – including tickets and advertisements -- across state lines. No American state had legally operated a lottery since the late 19th century, when Congress targeted the “Louisiana State Lottery Company,” a New York syndicate that bribed officials and sold most of its tickets outside of Louisiana. Though Puerto Ricans became United States citizens in 1917 with the passage of the Jones Act, it was constitutionally possible that it could operate something not legalized in the States (like a lottery) – provided that Governor Winship allowed it. Taking the advice of every department head within the Puerto Rican government, Winship approved the lottery on May 15, 1934. It was expected to run on July 1 of that year, with at least half of the proceeds going to the island’s health services.
But there was a problem. Americans living in the States, itching as they do today for an opportunity to strike it big, wanted to play; in mid-June, the island’s treasurer reported that thousands of letters had arrived from the mainland asking to purchase tickets. The feds, however, wouldn’t allow it. The Anti-Lottery Act would be applied to Puerto Rico as well, even though Puerto Rico wasn’t a state. The Interstate Commerce Commission refused to allow the territory to import or export of lottery tickets, but once on Puerto Rican soil, the tickets would be perfectly legal.
At the same time, on June 19, President Roosevelt signed the Communications Act, thereby establishing the Federal Communications Commission and centralizing all communication bylaws under one regulatory body. Starting on July 1, the FCC could regulate “radio, wireless, telephone, telegraph, cables and television” and “prohibit radio broadcasting of any information concerning any lottery, gift enterprise or similar scheme offering prizes dependent upon lot or chance.” So even if the Puerto Rican government had wanted to respond to the lottery inquiries through the mail or over the radio, it couldn’t. In September, the Radio Corporation of Puerto Rico announced it would not be able to broadcast winning numbers or winner names, and the postmaster of Puerto Rico issued a reminder that newspapers carrying winning information could not be sent through the mail.
On December 22, Maria Luisa Arcelay sat with Governor Winship underneath an American flag inside a government building in San Juan. In front of them, officials conducted the lottery in the style of the “Spanish Christmas Lottery,” last legally played on the island in 1899. Lottery officials pushed a button, setting in motion two brass discs filled with wooden balls: 5 unique digits from 00000 to 99999 were written on the balls in one disc, and prize amounts on those in the other. Simultaneously, someone would pull a ball from both discs. Choir boys then sang the winning number and the respective prize to the crowd gathered outside. As the lottery officials had decided to disperse $62,500 among 1370 prizes, they would have repeated this drawing 1370 times. It took nearly seven hours, but the first place prize – for $20,000 – was announced at 3 p.m. It went unclaimed for nearly two months.
During that time, most thought that the winning ticket was somewhere in New York City. The New York Times said it had been “reliably reported that 700 tickets went to New York’s Puerto Ricans, who conceivably had difficulty in learning the winning numbers.”
On February 15, a Puerto Rican bank president named Damian Monserrat stepped forward with the winning ticket. He said he had locked his ticket in his safe and hadn’t looked at it, thinking it was “only worth $200.”
Governor Winship found the lottery to be a success; it raised $62,500 for health care. One month later, Winship approved bimonthly drawings and by 1938, Puerto Rico’s assistant commissioner of commerce reported that the lottery had contributed $350,000 annually to fund “an anti-tuberculosis drive” that the health department believed had helped reverse the death rate.
After winning re-election in 1936, Maria Luisa Arcelay sponsored bills that included the establishment of a children’s orphanage and a teachers’ pension. She retired from government in 1940, and after fighting for the rights of workers in her needlework industry, retired in 1965. She died in 1981.
In February 2014, an anonymous person became the first Powerball jackpot winner to come from outside of the 50 states after purchasing a winning ticket at a gas station in Puerto Rico.
Editor's note, October 19, 2018: This story has been updated to reflect the most recent Mega Millions jackpot.