Lottery and Gaming Taxes

States use lottery and gaming revenues to fund a variety of public programs and services, including education and economic development, and as a supplement to general funds. Many states also employ a portion of gaming revenue to counteract the negative effects of gaming. Out of 24 states with commercial gaming, 23 fund treatment and research on gambling addiction. The National Council on Problem Gambling estimates that 2 million (1%) of adults are estimated to have a gambling addiction and another 4-6 million (2 to 3%) are considered problem gamblers.

Some states use lottery and gaming proceeds to fund the arts. Seven state arts agencies receive funds from lottery and gaming revenues, comprising on average 27% of these agencies’ state funding in fiscal year 2022. Lottery and gaming funds are significant sources of income for state arts agencies in Colorado, Iowa, Kansas and West Virginia (20 to 90% of state funding); they provide modest funding in Wisconsin. The newest programs include Maryland, which started to receive revenue from the state’s admission and amusement tax (on electronic bingo and electronic tip jars) in 2016; Oregon, where arts and culture began receiving funds from the state lottery in 2020; and Massachusetts where, since 2021, casino gaming revenue has supported the arts council’s arts and education programs.

For more information and detailed data on lottery or gaming taxes or other dedicated revenue strategies, contact NASAA Research Manager Mohja Rhoads.

States Receiving Funding from Lottery or Gaming Taxes



Urban Institute, Lotteries, Casinos, Sports Betting, and Other Types of State-Sanctioned Gambling, 2022.

National Conference of State Legislatures, Keeping State Lottery Revenue Alive, 2017.

Stateline, State Lotteries Fight ‘Jackpot Fatigue,’ Casino Competition, 2017.

The Council of State Governments, State Revenues from Gambling Shrinking, 2016.

The Nelson A. Rockefeller Institute of Government, State Revenues from Gambling: Short-Term Relief, Long-Term Disappointment, 2016.

American Gaming Association, Responsible Gaming Regulations & Statutes, 2016.

National Council on Problem Gambling, Responsible Gaming Resources.