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All About Lottery Revenues

What and who do lottery revenues benefit?

Lottery proceeds benefit different programs in different jurisdictions. In many cases lottery profits are combined with tax and other revenues in a government’s general fund. In other cases lottery proceeds are dedicated to a wide range of causes, including education, economic development, the environment, programs for senior citizens, health care, sports facilities, capital construction projects, cultural activities, tax relief, and others.

Who decides where the money goes?

In a few cases the recipients of lottery proceeds are specified in a jurisdiction’s constitution, but in most cases this decision is up to that state or province’s elected officials.

Do lotteries really benefit education?

First, not every jurisdiction dedicates lottery proceeds to education; in fact, less than half do. In many places where there is a dedication to education, state education spending has risen but other parts of the budget have risen faster. Education is therefore a smaller proportion of the budget than it was before the start of the lottery. Schools have benefited from lottery funds, but this contribution is often masked by the other demands placed on state budgets. It is also true that some non-lottery states spend a higher percentage of their budget on education than do lottery states, but in most cases the lottery states spend more per pupil. The funding needs of all states are not equal.

How much money do lotteries raise?

Since the New Hampshire lottery, the first modern American lottery, was founded in 1964, lotteries have raised more than $200 billion for government programs in North America. In fiscal year 04 Canadian lotteries transferred $3.1 billion ($CAN) to their beneficiaries, while U.S. lotteries turned over $14.5 billion ($US) to theirs.

Are lotteries an inefficient way to raise revenue?

Certainly lotteries are more expensive to administer than taxes, assuming we consider only the cost to government and not the costs to businesses and individuals in complying with tax laws. However, unlike taxes, lottery purchases are both voluntary and overwhelmingly preferred by the public. The lottery is fun and offers choices and excitement. Taxes, on the other hand, are mandatory and offer no excitement.

Does the government depend too much on lottery profits?

On the average, lotteries account for one-half of one percent of their state or provincial budgets. Governments are far, far, more dependent on tax and fee revenues than they are lottery proceeds. Voluntary, non-tax revenue sources are obviously more popular than taxes, and always will be.This information was found at www.naspl.org (North American Association of State and Provincial Lotteries)

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