Where does the Lottery Money go?

 Where is the Lottery Money Going?

The ticket sales go up when Powerball jackpots rise. This is a lot of money going out of the pockets every day citizens. According to the North American Association of State and Provincial Lotteries NASPL, Americans spent $73 billion in 2015 on lottery tickets.

What does all that money do? What does it do? Does it go to the government, a private company or to worthy causes? Who benefits the most from lottery revenues?

FEATURED VIDEO

How to Play Volleyball

How Lottery Revenue Is Distributed

Generally, lottery revenues are divided in three categories: payouts and commissions to winners and companies that sold them the tickets. Overhead costs and distribution to the states selling the tickets. Here is how it breaks down:

The lottery's majority, which is usually 50-60% of its total revenue, goes to the winners. This includes the big jackpots as well smaller prizes that match fewer numbers. The additional 5% revenue from the lottery comes in the form of commissions and bonuses to retailers for selling tickets.

A small percentage of the lottery's revenue is used to pay administrative expenses and overhead costs. This category also includes advertising, legal fees and salaries of staff.

The remainder of the lottery money is distributed to the participating states. The Powerball lottery is an example of this. Funds are distributed based upon ticket sales. States with higher ticket sales receive a greater share of the revenue. The state hosting the lottery receives all revenue.

According to the U.S. Census Board, state-administered lotteries contributed more than $21 million to state coffers in 2015, not including the revenue from multi-state lotteries like Mega Millions or Powerball.

What is the state's use of this money?

What Do States Do With Lottery Income?

Each state participant can decide how they want to spend the lottery funds.

Many states use a small portion of the lottery funds to address gambling addiction. Many states also allocate a portion of their lottery funding to a general fund, which can be used for budget cuts in critical areas such as roads and police forces, or other social services.

The rest are usually used for public works, most often the educational system. 14 states have laws that require all lottery revenue to be directed towards education.

NAASPL offers more information about how lottery funds are allocated to states.

Lottery Revenue can benefit good causes

The lottery has provided billions in income for participating states to benefit their citizens. Here are some examples.

Wisconsin uses its lottery funds in order to make it more affordable to own a home. The Wisconsin Lottery, Pari-mutuel On-Track Betting, and Bingo fund the Lottery. The funds are tallied, and then split among qualified residences to reduce each year's property taxes.

Minnesota spends approximately 25% of its lottery income into the Environment and Natural Resources Trust Fund. This fund was used to maintain water quality, protect wildlife and fish, and regulate septic pollution among other important initiatives.

Indiana invests lottery proceeds into the Build Indiana Fund. This fund has funded projects such as historic preservation, infrastructure upgrades, funding organizations that assist children and seniors, and many other projects to aid the state.

More than $900 Million dollars from the Pennsylvania Lottery have been used for programs that benefit the elderly. These include free transportation, rent reimbursements, care services and other benefits.

Texas Lottery developed a scratch-off game to help veterans. Since 2009, the lottery generated over $80 million. It has been distributed directly to veterans and their families. It was such a success, that additional lottery games have been created to aid vets.

The Georgia Lottery supports the HOPE scholarship program that allows students with academic excellence to receive degrees. The scholarship provides four years of tuition at a Georgia college or university, and a stipend for books. These lottery funds have given over a million Georgian students scholarships worth billions of dollars.

Many states have lottery funds that allow them to spend more money on education and not raise taxes.

Criticism of Lottery Funds Used for Good Causes

The idea that lottery money can help the greater good has been adopted by almost every state in America, including Washington DC, Puerto Rico and the US Virgin Islands. However, some critics don't believe so.

One problem is that public works funded by the lottery can be a burden on those with the lowest income. Research has shown that those who lose the greatest amount on the lottery are "males, Blacks and Native Americans" as well as those who live in poor neighborhoods. It is a way to encourage people already at a disadvantage to pay more to receive education and social benefits.

Another point of criticism is the fact that a lottery can make problem gambling more common in certain states. Do you think it is right for the state? If legal lotteries are linked to gambling addiction, shouldn't the state tempt addicts? on reasons why lottery tickets are so profitable