How Lottery Proceeds Are Used by State Governments


In the recent NASPL report, the national lottery industry reported sales figures for each state, the District of Columbia and Puerto Rico. Sales in nine states declined in 2003, with Delaware reporting the sharpest decline, a 6.8% decrease. By contrast, sales in Florida, West Virginia and Puerto Rico all increased in 2003. Per capita spending for the lottery increased across every state and territory, while the United States spent $26 billion on its lottery. For more information on the lottery’s impact on local economies, read the report.


Lottery games began as a way to raise funds for charity or for fortification. As the number of participants increased, the prize amounts grew as well, and the concept quickly spread from city to city. Historians generally agree that the modern-day lottery originated in the Low Countries, which eventually became the Netherlands, Belgium, and Luxembourg. From these hubs, lottery games quickly spread throughout the continent. In some areas, lottery games are still played today.


A study published in 1998 by the Council of State Governments looked at the types of lottery. Most were directly administered by the state lottery board. Only four lotteries were run by a quasi-governmental lottery corporation. Georgia, Kentucky and Louisiana operated their lotteries through a state lottery commission. All state lotteries have laws governing their operations, but their lottery boards have very little oversight. The amount of oversight varies by state legislature, but in general, state lotteries are governed by state legislatures.


Traditionally, lottery proceeds have gone to state governments. The United States reported $66.6 billion in lottery revenues during fiscal year 2015. While those numbers are impressive, the revenue doesn’t come tax-free. States incur costs that eat into the profits, including $21.4 billion for advertising and administration. However, many states have found creative ways to use lottery proceeds to support public projects. Listed below are some of the ways in which state governments are utilizing lottery revenues.

Per capita spending

According to a recent study by LendEDU, residents of New York spend an average of $399 on lottery tickets per capita. The state ranked seventh in the country in this category last year, behind only Massachusetts with $226 per capita. Illinois is the first midwestern state with lottery spending per capita above the national average, while Michigan comes in second at $112 per head. According to Sharp, per capita spending is her main driver of change.


The Regressivity of Lottery Taxes

Religious objections

One pastor in Alabama is speaking out against a lottery system in his state. The pastor argues that the lottery would target the poor and provide false hope to those looking for financial gain. While many people argue that lottery play is voluntary, religious objections to the lottery can be difficult to dismiss. Moreover, lottery-related legislation could lead to the emergence of an unprofitable, destructive industry. Here are some examples of religious objections to lottery games.