The $1.5 billion Powerball jackpot may have you thinking that lotteries print money for the states that run them, but the role they play in state budgets varies widely.
But that number doesn't tell the whole story. Some states rely heavily on lotteries for revenue, the researchers, Lucy Dadayan and Donald J. Boyd, note. In South Dakota, Oregon and Georgia, such games accounted for more than 5 percent of state revenues in the 2014 fiscal year. Other states could more easily take a pass: lotteries account for less than 1 percent of revenues in 11 states and less than 2 percent of revenues in another dozen states, as shown in the map below, which is based on their analysis.
Lotteries are a big business. In 2014, they generated just over $70 billion in annual sales, according to the North American Association of State and Provincial Lotteries. But most of that never makes it back to the states that run them. Filter out prize payments, administrative costs and all the other associated expenses and states are left with just about $18 billion or about a fourth of total sales, according to Dadayan and Boyd.
How that money is spent varies, too. Many states earmark the funds for specific uses—education, for example—though officials often game their own promises.
"When lottery revenue is higher than expected, states may be able to reduce nonlottery support for the dedicated program, freeing up funds for any purpose in the budget rather than increasing spending on the dedicated program," Dadayan and Boyd write.
Here's a look at the intended use for lottery revenues in each state:
|State||Where Does The Money Go To?|
|Indiana||Build Indiana Fund (for reducing the motor vehicle excise tax & funding parks, roads & other local infrastructure projects); Local Police & Firefighters' Pensions; Teachers' Retirement Fund|
|Illinois||Common School Fund; Capital Projects Fund; Other State Funds|
|Oregon||Economic Development Fund (education; job creation & economic development; state parks; watershed enhancement); General Obligation Bond Fund|
|Kansas||Economic Development Initiatives Fund; General Fund; Correctional Institutions Building Fund; Juvenile Detention Facilities Fund; Problem Gambling Grant Fund|
|Nebraska||Education Innovation Fund; Environmental Trust Fund; Opportunity Grant Fund; State Fair; Compulsive Gamblers Assistance Fund|
|Arkansas||Education Trust Account|
|New Hampshire||Education Trust Fund|
|New Jersey||Education; Higher Education; Human Services; Military and Veteran's Affairs; Agriculture|
|West Virginia||Education; Senior Citizens; Tourism & State Parks|
|Florida||Educational Enhancement Trust Fund|
|Texas||Foundation School Fund; Fund for Veterans' Assistance & Other State Programs|
|Wisconsin||Funding for Property Tax Credits|
|Kentucky||General Fund (college scholarship and grant programs)|
|Minnesota||General Fund (education, local gov. assistance, public safety, environmental protection); Game & Fish Fund; Natural Resources Fund; Environment & Natural Resources Trust Fund|
|Iowa||General Fund (education, natural resources, health & family services, public safety); Iowa Plan; CLEAN Fund; Veterans Trust Fund; Gambling Treatment Fund; Special Appropriations|
|Delaware||General Fund (Education; Health & Social Services; Natureal Resources & Environmental Control; Public Safety, Judicial & Corrections; Various Children, Youth & Family Organizations)|
|Rhode Island||General Fund (for human services, education, public safety, general government, debt services, natural resources)|
|South Dakota||General Fund (K‐12 education, state universities, technical institutes); Capital Construction Fund (water & environment; ethanol fuel; state highway)|
|Maine||General Fund (local schools, higher education, health services, other programs)|
|Maryland||General Fund (pre‐K‐12 & higher education, public health, public safety, environment); Maryland Stadium Authority; Veterans Trust Fund|
|Connecticut||General Fund (public health, libraries, public safety, education)|
|North Dakota||General Fund, Multi‐Jurisdictional Drug Task Force Fund, Compulsive Gambling Fund|
|Arizona||General Fund; Healthy Arizona; Mass Transit; University Bond Fund; Heritage Fund; Commerce Authority Arizona Competes Fund; Court‐appointed Special Advocate Fund; Economic Security Homeless Services; Department of Gaming|
|Colorado||Great Outdoors Colorado (GOCO); Conservation Trust Fund; Colorado Parks and Wildlife; Public School Capital Construction ‐ Building Excellent Schools Today (BEST) program|
|Pennsylvania||Local Services, Senior Centers & Meals; Low‐Cost Prescription Assistance; Free & Reduced‐Fare Transportation; Property Tax & Rent Rebates; Care Services|
|Massachusetts||Lottery revenues are distributed to the cities & towns. Lottery funds are not earmarked for specific programs, allowing cities & towns to choose how they would like to spend the funds|
|New Mexico||Lottery Tuition Fund|
|Louisiana||Minimum Foundation Program (K‐12 public education); Department of Health & Hospitals, Office of Behavioral Health (problem gambling)|
|Michigan||School Aid Fund; General Fund; Commmunity Health (gambling addiction programs)|
|Idaho||State Permanent Building Fund; Public School Building Fund; Bond Equalization Fund|
|Washington||Washington Opportunities Pathways Account; Education Legacy Trust Fund; Stadium and Exhibition Center Account; Economic Development; Problem Gambling|