The Impact of Lottery Revenues on State Budgets

In the past, lotteries were a great way for states to raise money without raising taxes. They allowed government to increase spending on things like education, health care and infrastructure without burdening middle- and working-class taxpayers. But now, lottery revenues have a much different impact and should be considered in the context of overall state budgets.

Historically, state lotteries start out with little more than traditional raffles — people purchase tickets for a drawing at some future date, usually weeks or months away. But innovations in the 1970s led to a rapid expansion of the lottery. Today, some states have multiple lotteries with games ranging from scratch-off tickets to video lottery terminals.

Many, but not all, lotteries publish lottery statistics online. These include the total number of applications, details about demand and the breakdown of successful applicants by various criteria. In addition, some state agencies have departments responsible for the administration of lottery activities. These departments typically have a broad range of responsibilities, including regulating the lottery industry and analyzing trends in demand.

Lotteries tend to communicate two messages — that playing is fun, and that you’re doing your civic duty when you buy a ticket. But both of these messages obscure the reality that lottery playing is a form of gambling that often has regressive impacts. Unless you’re lucky enough to win the big jackpot, most players will end up with much less than what they spend on tickets.