Neil McArthur was born in Glasgow, Scotland, on 19 March 1898, the son of George McArthur, a blacksmith, and his wife, Margaret McTavish, a dressmaker. He emigrated to New Zealand with his family around 1907 and settled in Wellington, where his father helped build some of the city's earliest steel-framed buildings. Neil attended Wellington College, leaving at the age of 16 to take up an apprenticeship in the Post and Telegraph Department as a draughtsman, a vocation he pursued for the next 13 years.
McArthur was keen on flying and had trained as a pilot in Wellington in 1918 with the hope of joining the Royal Air Force when, to his disappointment, the armistice was signed. This interest was reawakened during a trip to the United States in 1927, and on his return to Wellington that year he was elected founding secretary of the Wellington Aero Club. When the Auckland Aero Club raised an impressive £12,093 in a national lottery, the Wellington club president, T. C. A. Hislop, asked McArthur to organise a lottery, promising him a bonus if Auckland's total was exceeded. To promote the lottery, McArthur had Francis Chichester's sea-plane, Te Ika a Maui, which had recently flown from England to Australia, brought to Wellington and driven around the streets on a truck. He also persuaded Bertie Hammond, a lawyer and employers' advocate, to manage the books. The lottery raised £13,476 and McArthur received a £200 bonus.
Other organisations soon began to seek McArthur's services. He raised money for two more aero clubs, and early in 1930 raised over £15,000 to establish the country's first free ambulance service, in Wellington. Hammond joined him full time and they formed a private company to run 'art unions', as most lotteries were called at the time. Successful lotteries for the New Zealand Branch of the British Empire Cancer Campaign Society, the New Zealand Native Bird Protection Society, Christchurch's St John Ambulance Brigade, and other aero clubs followed.
Government regulations at the time allowed one organisation to operate a national lottery for three months, but the number of groups seeking to run lotteries was outstripping the ability to regulate their operation. The under-secretary of internal affairs, P. J. Kelleher, was impressed with Hammond and McArthur, and in January 1932 he persuaded his minister, Adam Hamilton, to contract them to organise a national art union, with profits to be divided among charitable and community groups. The government was content to divest itself of the financial responsibility for organising lotteries, and to concentrate instead on the distribution of profits. It proved an agreeable formula and was to survive virtually intact for the next 40 years.
Initially, Hammond and McArthur received £200 per lottery; later their fee was 30 per cent of the gross proceeds (excluding prizes and taxation) with an upper limit of £500. McArthur organised and supervised the lottery's manual draws, which took three hours every four weeks, resisting efforts in later years to modernise the process. After analysing buying trends, he focused advertising on holidays and dreamt up catchy titles for each lottery. The total prize pool began at £2,000, rising to £5,000 in 1936, partly in an effort to combat the popular Australian Tattersalls lotteries, which had much larger prizes and unrestricted advertising. The government allowed McArthur's art union only two further increases: to £7,000 in 1952 and to £10,000 in 1955.
By the 1950s the art union was an integral component of New Zealand's leisure landscape, comforting in its familiarity and untainted by corruption. Its small size and unchanging format represented a satisfactory compromise between the government and religious opponents, who were mollified by the fact that all profits went to worthy causes. The lottery itself – and McArthur's management – aptly reflected the ethos of the times: comfortable, uncontroversial and somewhat bland.
Change came slowly. As overseas lotteries continued to drain the bulk of local lottery investment, Leon Götz, the National government's minister of internal affairs, introduced the more expansive £30,000 Golden Kiwi lottery in 1961. McArthur was appointed to run it and did so with great success. When the Golden Kiwi lost its gloss in 1964, the government introduced four Golden Kiwi Mammoths, worth £135,000, to run alongside it. Queues formed before dawn on opening days to buy tickets, eclipsing interest in Tattersalls.
By the late 1960s, however, interest in both these lotteries was fading. McArthur pleaded for leaner, more dynamic and more frequent 'mini-Mammoths', but failed to convince the government. Weary from the battle, he retired as managing director of Hammond and McArthur in March 1973, 46 years after he had organised his first national lottery. He had been its Auckland director for more than half that time and was the government's inspector of patriotic raffles during the Second World War. He had enjoyed a generally close relationship with 11 successive ministers of internal affairs and their under-secretaries, despite his persistent approaches to them to expand their operation.
A dapper, quietly spoken but assertive man, Neil McArthur was industrious, scrupulously honest and possessed a self-effacing, dry sense of humour. His operation was frugal and parochial, but beyond reproach. His staff were never allowed to accept even small presents from winners and McArthur himself never took a ticket. He visited Australia, Europe and the United States to observe lottery administration and in 1972 an international study considered his operation the third most efficient in the world, after the Israel state lottery and Tattersalls in Australia.
McArthur had married Edna Rebecca Cole on 22 July 1933, in Auckland; they had two sons and a daughter. One of his sons, Ross, worked for Hammond and McArthur from 1961, becoming Auckland district manager. Outside his lottery organisation, Neil McArthur's main interest was sport. He played football for Wellington for a number of years, and was a member of the Wellington YMCA team that won the Chatham Cup in 1925. He represented New Zealand at right-half against Australia in 1922 and 1923, and against a visiting Chinese universities team the following year. In later years he played golf and bowls, and swam in Auckland's Okahu Bay every morning from Labour weekend until Easter. He died at Warkworth on 2 April 1974, survived by his wife and children.