Casanova's Lottery: The History of a Revolutionary Game of Chance

By Stephen M. Stigler

The fascinating story of an important lottery that flourished in France from 1757 to 1836 and its role in transforming our understanding of the nature of risk.

In the 1750s, at the urging of famed adventurer Giacomo Casanova, the French state began to embrace risk in adopting a new Loterie. The prize amounts paid varied, depending on the number of tickets bought and the amount of the bet, as determined by each individual bettor. The state could lose money on any individual Loterie drawing while being statistically guaranteed to come out on top in the long run. In adopting this framework, the French state took on risk in a way no other has, before or after. At each drawing the state was at risk of losing a large amount; what is more, that risk was precisely calculable, generally well understood, and yet taken on by the state with little more than a mathematical theory to protect it.

Stephen M. Stigler follows the Loterie from its curious inception through its hiatus during the French Revolution, its renewal and expansion in 1797, and finally to its suppression in 1836, examining throughout the wider question of how members of the public came to trust in new financial technologies and believe in their value. Drawing from an extensive collection of rare ephemera, Stigler pieces together the Loterie’s remarkable inner workings, as well as its implications for the nature of risk and the role of lotteries in social life over the period 1700–1950. 

Both a fun read and fodder for many fields, Casanova's Lottery shines new light on the conscious introduction of risk into the management of a nation-state and the rationality of playing unfair games.

• Language: English
• Publisher: University of Chicago Press
• Release date: Oct 20, 2022
• ISBN: 9780226820781

Book preview

Cover Page for Casanova's Lottery

Casanova’s Lottery

Casanova’s Lottery

The History of a Revolutionary Game of Chance

Stephen M. Stigler

The University of Chicago Press

Chicago and London

The University of Chicago Press, Chicago 60637

The University of Chicago Press, Ltd., London

© 2022 by The University of Chicago

All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission, except in the case of brief quotations in critical articles and reviews. For more information, contact the University of Chicago Press, 1427 E. 60th St., Chicago, IL 60637.

Published 2022

Printed in the United States of America

31 30 29 28 27 26 25 24 23 22     1 2 3 4 5

ISBN-13: 978-0-226-82077-4 (cloth)

ISBN-13: 978-0-226-82079-8 (paper)

ISBN-13: 978-0-226-82078-1 (e-book)

DOI: https://doi.org/10.7208/chicago/9780226820781.001.0001

Library of Congress Cataloging-in-Publication Data

Names: Stigler, Stephen M., author.

Title: Casanova’s lottery : the history of a revolutionary game of chance / Stephen M. Stigler.

Description: Chicago ; London : The University of Chicago Press, 2022. | Includes bibliographical references and index.

Identifiers: LCCN 2022003384 | ISBN 9780226820774 (cloth) | ISBN 9780226820798 (paperback) | ISBN 9780226820781 (ebook)

Subjects: LCSH: Lotteries—France—History—18th century. | Lotteries—France—History—19th century. | Risk—Social aspects—France.

Classification: LCC HG6195 .S75 2022 | DDC 795.3/80944—dc23/eng/20220201

LC record available at https://lccn.loc.gov/2022003384

This paper meets the requirements of ANSI/NISO Z39.48-1992 (Permanence of Paper).

To Virginia, my winning ticket in the lottery of life

Contents

Introduction

One. Casanova

Two. The Genoese Lottery

Three. The Establishment of the Loterie in 1757

Four. Problems and Adjustments in the Early Drawings

Five. Antoine Blanquet and the Great Expansion of 1776

Six. The Introduction of Bonus Numbers: Les Primes Gratuites

Seven. The Spread of the Loterie in Europe

Eight. Data Security: The Design of the Tickets

Nine. The Loterie and the Revolution

Ten. Was the Loterie Fair?

Eleven. Dreams and Astrology: The Bettors and the Loterie

Twelve. The Number 45 and the Maturity of Chances

Thirteen. How Much Did They Bet, and Where?

Fourteen. Muskets, Fine-Tuned Risk, and Voltaire

Fifteen. The Loterie in Textbooks and Manuals

Sixteen. The Suppression of the Loterie in 1836

Conclusion

Acknowledgments

Appendix 1. Probability

Appendix 2. Laplace’s Lottery Theorem

Notes

References

Index

Introduction

This is the history of an unusual lottery, one that flourished in France from 1758 until 1836 with a three-year hiatus during the French Revolution. It certainly was not the first state lottery: the modern history of state lotteries goes back at least to the sixteenth century. Nor was it the first based upon the same plan for carrying out the drawing, a plan that was an ancestor of modern lotto and was introduced in the seventeenth century on a small scale in a few Italian cities. But this lottery was unique in one intriguing aspect: In adopting its framework, the French state took on risk in a way no other state lottery has done, before or since. At each drawing, the state was at risk of losing a large amount; what is more, that risk was precisely calculable, generally well understood, and yet taken on by the state with little more than a mathematical theory to protect it. At its peak, it provided up to 4 percent of the French national income.

France by the 1750s was familiar with financial innovation. The sixty-four-year reign of the Sun King, Louis XIV of France, ended with his death in 1715. His was the longest reign in European history, and he left a treasury that was essentially bankrupt, principally due to debts accumulated in a long series of wars. The French economy, predominantly agricultural, was doing well, but the nearly panicked Finance Ministry could not find much solace in that, and this led to financial experimentation and one of the most improbable careers in history.

John Law was born in Scotland in 1671. By 1694 he was living in London, where he killed a man in a duel with swords over a woman’s affection, and was sentenced to death. But he managed first to get out on appeal and later to escape and flee to the continent, where he traveled between Amsterdam and Paris, and by 1715 caught the ear of the Duke of Orléans. The duke became the regent of France at the death of Louis XIV and was central to the Finance Ministry, and he was receptive to a plan Law had been pushing: a managed currency based on instruments of credit rather than stocks of precious metals. In effect, Law invented the basis for most nations’ currency of the present day, but in his case it was based upon volatile investments involving North American fur trade and land contracts, the beginning of what came to be called the Mississippi Bubble. At first it went well: from 1715 to 1720 he founded the Banque générale, which then became the National Bank. By 1720 he was the French controller-general of finances (essentially the prime minister), and he became the wealthiest man in the world, at one time or another owning twenty-one estates in France. But the volatility, and a few unwise actions in coping with it, undermined public confidence.¹ The swings in value of the Mississippi shares were mild in comparison to those that would come with the later currency assignats introduced by the Revolutionary government in 1790. Unlike the assignats, Law’s new currency never became valueless, but confidence in it was shaken to the point where the currency was eventually returned to a base in gold and silver.² The episode brought ruin to many people in the already stressed French and British economies. Law was pushed out of his appointment, and left France. After a few more adventures, he died in Venice in 1729.

The French treasury recovered, but the episode left conflicting lessons. It opened eyes to the possibility of financial experimentation, and it alerted the ministers to the high risks and potential costs involved with such experimentation. As would be expected in human affairs, these lessons were heeded, but not for long. Within a decade of John Law’s departure, a peculiar scheme was devised with the aim of eliminating some of the accumulated debt, but with a defect in conception that allowed the French philosopher Voltaire and the French explorer-mathematician La Condamine to make millions of francs with essentially no risk (see chapter 14). This and many other such projects involved lotteries; most of these were a variation on a plan that may have originated in the Netherlands in the 1400s.

Those state lotteries were set up as raffles. A large number of tickets were to be sold, and a fraction of the proceeds—often at least a half—would be set aside for the state, with the remainder allocated as prizes. A drawing would be held, tickets would be picked in an apparently random way, and the prizes given in different amounts to the winners. That scheme was attractive to the state because once the tickets were sold, the state was guaranteed to make a profit. But that certainty was illusory. The ticket buyers were not given any guarantee, and the sale could be a hard sell indeed. It might take years to sell the tickets, and the sale might never be completed, leading the state to retrospectively change the rules and lower the payout: a practice that not only generated rebellious ill will but also made the launching of a second lottery a nearly impossible task. In 1567, Queen Elizabeth of England, through her ministers, announced a lottery to help support her navy. A total of 400,000 tickets were to be sold for ten shillings each, gaining a net profit of £100,000 for the Crown.³ But after two years, less than a tenth of the tickets had been sold. The lottery was held with prizes proportionately reduced, and with the gain to the Crown eaten up by expenses. On paper, there was no way such lotteries could lose money; in practice they were cumbersome in administration, and could take months or years to complete. And if the sales failed, so did the lottery and the reputation of the state.

The new French plan instituted in 1758 was based upon an earlier lottery believed to have originated in Genoa (see chapter 2). The Genoese lottery had significant advantages. It could be offered frequently: at one time in France, there were fifteen drawings a month. It could scale up geographically: at one time there were more than a thousand offices in France alone. It allowed the clientele to shape their own bets, to take on as much or as little risk as they wished. But it also presented new and difficult challenges.

The raffles lotteries had the comfort of knowing that the number of winners was strictly limited, and that the policing of awards was relatively easy. Indeed, they did not need to worry greatly if the prize went to the right person; they paid out the same amount whether the award was accurately given or not. With the French Loterie (I will call it by its French name, to distinguish it from other species), the number of winners was unknown in advance since many people could hold bets on the same numbers, perhaps yielding many winners of the largest prizes. The opportunity for fraud was immense, either through counterfeited tickets or through crooked agents selling tickets after the drawing was announced. The administrative burdens were correspondingly immense: all of this oversight was needed everywhere, in a system of a thousand offices at one time, spread over an empire. The French at that time tended to farm out—or outsource, in modern terminology—the administration of other tax-generating efforts, but not so with the Loterie. Apparently the risks were such that closer control was deemed necessary.

The response to these challenges was the development of novel schemes for what we now call data security, some of which bear uncanny resemblance to schemes employed in the Internet age (see chapter 8). There were also innovations in bookkeeping that went far beyond the simple double entry that had been introduced in the 1400s, where two entries—assets and liabilities—gave a simple check in sums; the Loterie officials needed full accuracy in every entry of a bet, with links to the bettor’s name. Admittedly, they also had, and used, some deterrents we do not employ today, such as the dungeon.

The challenges that came with the scale of the enterprise were many. The sales offices required agents with some knowledge of mathematics beyond simple arithmetic—skills not taught universally in that era, and which thus required job training. Communication at a distance was slow, and some of the distances were quite large. There was competition from foreign lotteries eager to sell in France as well. While, as in the present day, a large amount of the public comment was directed against the Loterie, the only governmental actions taken were instead aimed to prohibit foreign entry, and were less than successful. As the Loterie administration learned what worked and what was unnecessary, and as methods of fraud advanced as well, there was a need for minor changes in data security methods.

Figure 0.1. Menut’s 1834 book which initiated this investigation: the Almanach Romain sur la loterie de France.

Understanding how the lottery worked and how it was used by the betting public presents a difficult problem for a historian. Existing histories are plentiful but superficial; they are not concerned with details of operation, and those details are not easy to obtain. Yet the details were crucial for success. My investigation was begun in 1994 when I purchased a small book by mail, sight unseen, from a French bookseller for $350. It was dirty, worn, and falling apart at the seams (figure 0.1).⁴

The book, the Almanach Romain sur la loterie de France, was of a species of literature referred to as ephemera. It was published in 1834 and intended to be consumed rather than read or archived. Its multiple roles in this story will be revealed as the story progresses, but my immediate reaction on seeing it was skepticism. It was a lottery almanac with information for gamblers. But what soon caught my eye was the rather large amount of data: not just occasional facts, of which there were many, but also a list of all the winning numbers for the entire history of the Loterie since 1758, as well as data on prizes actually awarded. It included data through 1834, some written by hand by an early owner, and thus covered almost the entire history of the Loterie.

Several questions immediately came to mind. Were the drawings fair (see chapter 10)? Were there any trends in behavior (see chapters 13 and 17)? Converting the data to digital form for modern analysis was not simple then or now—the dirty pages and old fonts were not accessible by 1994 optical character recognition programs. I started to type the data in, very slowly. And then one day a bright University of Chicago undergraduate student named Teresa Ging stopped by my office and asked if I had any suggestions for her senior honors paper. She wrote a fine paper, and with her help I got a digital archive.

That old book and others in the same spirit served as unusual sources, opening a look at how the Loterie was carried out, who bought tickets, and what size bets they placed. In fact, as I later realized, the Almanach gave the results of a precisely randomized survey of the French betting public in the early 1800s, more than a century before randomized surveys were invented. (chapter 11) This realization helped answer a number of these questions, as we shall see.

Another source was an extensive collection of French laws and decrees I accumulated, some in bound form, many as originally printed for distribution. These were documents that shed light by their extremely detailed description of procedures, and by their choice of which topics to detail and which to omit, all of this information conspicuously absent in many histories.⁵ As I accumulated these and many other books and pamphlets on lotteries from 1619 to the present, a broad picture of the Loterie and its position in society began to emerge, complementary to the narrow details of operation that held their own fascination. This was helped by my acquisition of three very large scrapbooks of lottery ephemera from England and the continent, including tickets, advertising bills, notices, contracts, and even manuscript material from the 1600s to 1900.

The broader picture of the Loterie derived from these varied sources helps us understand its place in the history of risk. Embarking on an endeavor with uncertain hopes for gain and the risk of loss has always been an unavoidable part of life, for the earliest hunter-gatherer as for the modern pedestrian crossing a busy street. Perhaps as an evolutionary consequence of the ubiquity of risk, an actual taste for risk can also be found in all societies of all times. This can be clearly seen in the presence of gambling throughout recorded history. Dice appear in archeological digs associated with cultures at least as far back as that of the Akkadians in 2300 BCE: yes, cubical dice numbered one to six on the sides, a pattern pointing to the appearance of gambling being as old as the appearance of writing. By about 600 BCE, dice began to be widely made with opposite sides adding to seven, just like modern casino dice and surely for the same reason: to allow easy detection of false dice.⁶

For a century prior to the founding of the Loterie, there were great changes in how people viewed risk or chance. The philosopher Ian Hacking identified the period from the 1660s to the 1710s as the Emergence of Probability, when earlier vague concepts based on tendencies became a precise mathematical science—with laws of large numbers and the beginnings of a full calculus of chances—through the works of Pascal and Fermat in the 1650s, and those of Jacob Bernoulli, Abraham de Moivre, and Pierre Rémond de Montmort from 1700 to 1720.⁷ This work was brought to a much wider readership first by Christian Huygens, whose deceptively simple tract of 1657 was reprinted often over a sixty-year period, and later by Richard Seymour, Thomas Simpson, Edmond Hoyle, and many other authors of books for gamblers. At roughly the same time, whole industries offering annuities and insurance were growing and profiting from the realization that in some cases, as Ian Hacking later termed it, chance could be tamed.⁸ That term was a bit overly optimistic. What was unpredictable in individual cases could be reliably predicted in aggregates of individuals; but, as investors repeatedly learn, chance is never really tamed. The law of large numbers was a mathematical theorem; it was also an empirically demonstrated fact. But as with civil laws, violations of the law do occur at inconvenient times. By the 1750s, the soil was fertile for more French financial experimentation, this time with the Loterie.⁹

Of course, this raises other questions. Why did other nations not try the same experiment? And once the French had a huge success, one that furnished large amounts for the national treasury, why did they close the Loterie down in 1836? The answer to the first question is that several countries did try the same experiment, at least in much smaller-scaled and more tentative enterprises, as we shall see. These included many German cities, where adoption soon ran into the challenges the French had overcome only with difficulty. This was true even in the case of Frederick the Great in Prussia, who uncharacteristically lacked the spine to persevere. Still others planted different crops—different lotteries thought to be safer—in that same soil. As for the second question—Why was the Loterie suppressed in 1836?—that is the subject of the final chapter of this book.

A note on French currency: Over the centuries discussed here, there were many changes in the use of names for monetary units —and, to a lesser degree, in the units themselves. Before 1641, and after 1795 until the euro, the basic unit was popularly known as the franc. In 1641, the value of one franc was determined by one livre tournois—literally one Tours pound of silver, the standard in the city of Tours—and the common term in use for a unit became livre. Before 1795, the year in which the metric system was introduced, the livre or franc was divided into twenty sol, or twenty sous. After 1795, it was divided into one hundred centimes. To try to lessen confusion, the term franc is here used consistently as the unit, even for the period when it was not in common use. The smaller units (sol, sou, or centime) are used as is appropriate to the time discussed.

One

Casanova

Giacomo Casanova was born in Venice in 1725. His parents were an actress and an actor. In his early years he showed all the traits that would mark his later life: an inquisitive intelligence and broad interests, without the capacity to pursue any one for very long. By the time he was twenty-one he had studied philosophy, mathematics, medicine, law, religion, and music, and had explored careers in religion, the military, music, and gambling. He was a magnet for scandal, whether through his talent for seduction, his interests in mystical religion, or his gambling losses; and he had an uncanny ability to recover, often after having fled to another city or country. Early on, he met and impressed powerful people: cardinals and the pope in Italy, philosophers and royalty abroad. He became acquainted with Voltaire, Goethe, and Mozart. In the 1790s, having worn out his welcome in most of Europe, he found refuge as a guest in the Castle of Dux (now Duchkov, in the Czech Republic) where he wrote (in French) his extensive memoirs, the chief basis of his posthumous fame. They were not published until the 1820s, decades after his death in 1797, and for many years they were only known for his accounts of romantic adventures. One edition had the added note, These memoirs were not written for children; they may outrage readers also offended by Chaucer, La Fontaine, Rabelais and the Old Testament. More recently, they have been recognized as a unique social history of his time, and have been praised by literary critics as diverse as Edmund Wilson and Stefan Zweig as one the great literary achievements of the eighteenth century.¹ The manuscript now resides in Paris, and a definitive edition has reached its third volume, with more to come.²

Even early in his life, Casanova had made innumerable enemies, most consequentially the Venetian Inquisition. In 1753 in Venice he had helped save the life of the powerful Senator Bragadin, thus acquiring an important patron. But two years later, even his patron was insufficient protection when his enemies managed to arrange for the Inquisition to catch him with forbidden books on the mystical sect of cabalism, and with evidence of engagement in Freemasonry. On 12 September 1755 he was sentenced to five years imprisonment in the Piombi (Leads), a high-security prison on the top floor of the doge’s palace in the center of Venice. Its name derived from the slabs of