Publications
Lottery and Gambling Taxes
State-run lotteries are the most popular form of commercial gambling in the U.S., with half or more Americans participating in any given year. In 2003 total consumer spending on lotteries was nearly $45 billion—or $155 per capita—and today the average American spends more money on lotteries than on reading materials or movie theaters. Lotteries constitute an implicit tax similar to excise taxes on goods like cigarettes and alcohol. They are generally considered poor tax policy because they are regressive, not transparent to taxpayers, and aren't neutral and therefore distort economic behavior.
Additional questions about lottery and gambling taxes? Contact us at (202) 464-6200.
Publications from The Tax Foundation
- Testimony to Vermont Blue Ribbon Tax Structure Commission: The Role of the Lottery in Vermont’s Tax Policy, by Alicia Hansen, November 17, 2009
- Urging North Carolina Courts to Hold Lottery Is a Tax -- Heatherly v. State, by Joseph Henchman, Chris Atkins and Kevin W. Benedict, September 8, 2008
- Options for the Future of Vermont's Lottery (Testimony Before the Ways and Means Committee of the Vermont Legislature), by Alicia Hansen, January 16, 2008
- Gambling with Tax Policy: States' Growing Reliance on Lottery Tax Revenue, by Alicia Hansen, July 3, 2007
- Lottery Taxes Divert Income from Retirement Savings, by Alicia Hansen and Gerald Prante, January 19, 2006
- State-Run Lotteries as a Form of Taxation, by Alicia Hansen, October 8, 2005
- Lotteries and State Fiscal Policy, by Alicia Hansen, October 1, 2004
- Lotteries: Entering the Big Time in State Finance, by John Hanley Adams, November 11, 1987