Lotteries in the state fiscal system

Lotteries give states direct revenue from the commercial gambling market. Thirty-two states plus the District of Columbia, encompassing almost three-quarters of the population, operate games, a dramatic spread since the first modern lottery in New Hampshire (1964). These lotteries typically make only a small contribution to state finances, yield revenue that is subject to dramatic annual changes, are expensive to administer, and place relatively greater burdens on low income than on high income individuals. Proceeds are often dedicated to particular functions, but whether lottery proceeds do more than simply substitute for funds that the function would otherwise receive is doubtful. The fiscal limitations of lotteries have not dimmed the public popularity of the games.