Risk takings

Dozens of state governments are increasing their dependence on revenues from lotteries and casinos, but even without slots and table games Massachusetts is near the head of the pack. In fiscal year 2002, revenue from gambling activities, almost all of it from the state lottery, accounted for 4.24 percent of the state’s total revenue, up from 2.69 percent five years earlier. (“Revenue” includes proceeds from lottery programs minus prizes and administrative costs, as reported to the US Census Bureau. In the Bay State’s case, it also includes some $239 million that was then paid out as commissions and bonuses to lottery agents.) Among the 10 states most dependent on gambling revenue,Massachusetts is the only one without casinos or video lottery games. Indeed, the lottery is so successful here that Massachusetts has overtaken two casino states, Connecticut and New Jersey,by two criteria—total gambling revenue ($1.1 billion in 2002, second only to New York) and in the percentage of state revenue that comes from gambling sources.

Twenty states depended less on gambling revenue in 2002 than in 1997 (though gambling revenues still rose in five of them). Several had no lotteries and collected taxes only from the shrinking racetrack market. Census figures indicate that a few others, notably Oregon and Pennsylvania, increased the percentage of lottery revenue that is disbursed as prizes (from about 50 percent to 70 percent), presumably hoping that what worked in Massachusetts will help boost sales in their own states.

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Ohio’s drop in gambling revenue coincided with the introduction of casinos in next-door Indiana, new video lottery outlets in next-door West Virginia, and the growing popularity of tickets for the multistate Power Ball lottery (not sold in Ohio but in four of the five states that border it). Ohio’s loss at the hands of other states suggests that rising gambling revenues aren’t always a sure thing.

According to the North American Association of State and Provincial Lotteries (www.naspl.org), lottery sales increased by 4.4 percent in Massachusetts during fiscal year 2004, against a nationwide increase of 8.0 percent. The biggest increase came in South Carolina (up 31.2 percent), which introduced its games three years ago. But that state’s annual lottery sales of $228 per capita is still far short of the Bay State’s $681 per person.

STATE REVENUE FROM GAMBLING ACTIVITIES

Rank
State
2002 Revenue From Gambling
Gambling Revenue As % of All Revenue, 2002
Gambling Revenue As % of All Revenue, 1997
1
Nevada*
$720,700
10.46
7.59
2
Delaware**
$330,700
6.83
3.94
3
South Dakota**
$110,700
4.44
4.15
4
Rhode Island**
$215,600
4.41
2.26
5
Massachusetts
$1,140,400
4.24
2.36
6
Connecticut
$648,200
3.81
3.26
7
Indiana
$691,400
3.44
1.02
8
New Jersey
$1,122,400
3.43
2.70
9
West Virginia**
$312,600
3.42
1.08
10
Luisiana
$613,100
3.39
0.67
11
Georgia
$723,400
2.91
2.34
12
Illinois
$1,137,200
2.77
2.28
13
Iowa
$249,600
2.24
1.68
14
Maryland
$448,200
2.16
2.02
15
Florida
$946,100
1.98
2.13
16
Missouri
$376,200
1.97
1.54
17
Colorado
$207,600
1.76
0.80
18
Michigan
$734,500
1.67
1.31
18
Mississippi*
$184,200
1.67
2.05
20
Texas
$967,000
1.60
1.90
21
New York
$1,617,900
1.55
1.65
22
New Hampshire
$71,500
1.54
1.68
23
Virginia
$313,100
1.33
1.46
24
Montana
$51,900
1.29
0.17
25
Ohio
$553,200
1.22
2.34
26
Kentucky
$183,700
1.14
1.16
27
Oregon**
$151,700
1.02
3.63
28
Maine
$46,900
0.86
1.04
29
Pennsylvania
$345,200
0.75
1.43
30
New Mexico
$345,200
0.72
0.34
31
California
$1,063,500
0.70
0.62
32
Kansas
$63,700
0.69
0.70
33
Wisconsin
$124,400
0.60
0.58
34
North Dakota*
$16,600
0.55
0.39
35
Arizona
$88,500
0.51
0.60
35
Minnesota
$114,400
0.51
0.56
37
Vermont
$16,300
0.50
1.10
38
Idaho
$21,300
0.47
0.42
39
Nebraska
$25,100
0.42
0.52
40
Washington
$97,800
0.41
0.37
41
South Carolina*
$29,000
0.17
0.20
42
Oklahoma*
$10,100
0.08
0.15
43
Alaska*
$2,500
0.05
0.02
44
Arkansas*
$4,400
0.04
0.09
44
North Carolina*
$11,100
0.04
0.00
46
Alabama*
$3,700
0.02
0.03
47
Whyoming*
$200
0.01
0.00
48
Hawaii*
$0
0.00
0.00
48
Tennessee*
$0
0.00
0.00
48
Utah*
$0
0.00
0.00
U.S. Totals
$17,082,700
1.56
1.41

Note: States in italics received more than half of their gambling revenues from sources other than lottery programs (e.g., taxes and other payments from casinos and racetracks).
*No state lottery. Since 2002, lotteries have been implemented or authorized in North Dakota, Oklahoma, South Carolina, and Tennessee.
**State lottery revenue includes proceeds from video lottery terminals.
Source: US Census Bureau (www.census.gov)