Research Areas
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.
Articles 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
- State Lottery Sales Per Capita, Fiscal Year 2007 , January 22, 2009
- Lottery Revenue as a Percentage of Own-Source Revenue by State, Fiscal Year 2007 , January 22, 2009
- Implicit Tax Rates on State Lottery Sales by State, Fiscal Year 2007 , January 22, 2009
- Pros and Cons of the Maryland Slots Proposal, from a Tax Policy Perspective, by Alicia Hansen and Gerald Prante, November 3, 2008
- 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
- A Modest Proposal for Raising Education Revenue in Arkansas Without a Lottery, by Alicia Hansen, March 11, 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
- Lottery supporters need education in tax policy, by Alicia Hansen, March 27, 2005
- More gambling for the children in Maryland, by Alicia Hansen, March 25, 2005
- Gamble Away Your State's Fiscal Responsibility in Three Easy Steps, by Alicia Hansen, March 18, 2005
- Internet Lottery Sales: Click Here to Pay Higher Taxes, by Alicia Hansen, March 18, 2005
- More Gambling for the Children?, by Alicia Hansen, March 1, 2005
- As tax method, lottery's a poor choice for Mississippi, by Alicia Hansen, February 25, 2005
- Upping the Ante on Nevada Gambling: Will the Legislature Approve a Lottery?, by Alicia Hansen, February 3, 2005
- Lotteries are another state tax — but with better marketing, by Alicia Hansen, January 3, 2005
- R.I. lottery is a tax that hurts citizens, by Alicia Hansen, December 16, 2004
- Don't bet N.C. tax system on the lottery, by Alicia Hansen, November 17, 2004
- 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
- Links to Other Tax Policy Resources, December 31, 1969