According to Ancient Chinese history, Cheung Leung of the Han Dynasty created a game very similar to Keno around 200AD to fund the war that had been going on for several years. Funds to support the way were getting low and the people of Leung's city were refusing to contribute more of their wages to support the war. Leung decided a game of chance, similar to Keno would be the best way to generate revenue for his army.

If you have played online Keno, you may have noticed the similarities between Keno and a lotto or lottery game. The reason for this is Keno is a form of a lotto. The name has changed a few times in the last 3000 years, but by all accounts the Chinese invented the game as discussed above to fund the war, their army and the Great Wall of China.

The game derived from the well known poem, 'The Thousand Character Classic', which prior to being used for Keno, was a romantic numbering system, since no 2 characters were alike. Keno started out using 120 Chinese Characters. Prior to the game leaving China, it was reduced to just 90 characters. The game was further reduced to 80 Chinese Characters when it followed Chinese railroad workers in the 18th century to the United States.

Although illegal, Keno thrived among Chinese immigrants, especially around big cities like San Francisco. It became known as the Chinese lottery. English speaking Americans became interested in the game, but had difficulty differentiating the Chinese characters used in the game. Around the beginning of the 20th century, Keno operators replaced the Chinese characters with Arabic numbers to entice more players.

Although Nevada legalized most forms of gambling in 1931, lottery was not legalized by the legislature. Chinese Lottery was not changed to Keno until the early 20th century, when gambling was legalized in Nevada. Since the legalization of gambling did not include lottery, the game was changes to Horse Race Keno, using the idea that the numbers represented horses and you wanted your horse to place first, rather then your number coming first. Shortly thereafter, Nevada placed a tax on all Off Track Betting and to avoid this tax, the name was shortened to Keno.