Ancient Chinese scrolls indicate that Cheung Leung of the Han Dynasty introduced a game similar to keno around 200 BC. Cheung's city was at war for several years and was beginning to run out of supplies. Rumor has it that the citizens of his city refused to contribute any more to the war fund, so Cheung created a game of chance to produce revenue for his army.

This game, a numbers game not unlike keno, was an instant success and played a great part in saving the city. Quickly spreading throughout China, keno was also used to help fund the building of the Great Wall. The game also became known as the White Pigeon Game because carrier pigeons were used to send the winning numbers from the keno games in the larger cities to small villages and hamlets.

Initially, the game failed to make its way into mainstream North American culture because it continued to use the Chinese characters as numbers. Keno history didn't evolve further until near the end of the 19th century, when the characters were replaced with more familiar numbers. Originally as many as 120 characters were used in the game, only after it left china would the number drop to a more familiar 80 and was referred to as the Chinese Lottery.

When gambling was legalized in Nevada in 1931, the fact that lotteries were not covered under the legislature discouraged no one. All they had to do was change the name of the “Chinese lottery” to something else. Thus, it was changed to “horse race keno,” playing off of the idea that the numbers are horses, and players want their “horses” to come in. As the government passed a law that taxed off-track betting, Nevada swiftly changed the name again, shortening it to just keno.