Wyoming Becomes Latest to Adopt State Lottery: Where Does the Revenue Go?

Wyoming's legalization of a state lottery in March 2013 made it the 44th state with such a lottery. While Hawaii and Utah continue to ban all forms of gambling, the other states without lotteries (Alabama, Alaska, Mississippi, and Nevada) profit from casinos and other forms of gambling, but have yet to cash in on lottery revenues which totaled more than $19 billion last year.

Democrats in Alabama have pushed several times for a state lottery to help fund education and keep Alabama money from flowing into other states, such as Georgia, where they have a lottery.  The idea was defeated by popular vote in 1999, and this year's proposal failed to make it out of committee.  Those opposed to a state lottery argue that the revenue raised is not enough to offset social costs, such as problem gambling and exploitation of the poor, who disproportionately buy lottery tickets. 

Alaska, while not in need of extra revenue from the lottery due to oil and other natural resources, also considered a state lottery in the early 2000s, but it was rejected largely on moral grounds.  

Mississippi introduced a bill this year to create a state lottery to fund education, but this also failed to make it out of committee.  Mississippi faces the same moral opposition as Alabama and Alaska.

Nevada, although known for gambling, has also been unable to pass legislation legalizing a state lottery, but for different reasons.  Although proposed every year since 1975, the top industry in Nevada, casinos, sees a state lottery as competition and their gaming lobbyists have prevented any legislation from passing.  

Most states use some of their lottery revenue to fund education, and 17 states mandate that revenue be used exclusively for this purpose.  Six states and the District of Columbia give the revenue to their General Fund to be used for any purpose without restrictions.  At least six states designate some portion of the revenues to programs which help those with gambling problems. 

    Download the Table: Where States Spend Lottery Revenue