1State Lotteries at the Turn of the Century: Report to the National Gambling Impact Study Commission1

This report provides an overview of lottery operations, with particular attention to who plays the lottery, how the lotteries are marketed, and what kinds of policy alternatives exist for state and federal policymakers. Section I of the report provides a descriptive overview of state lotteries, a statistical profile, and a description of the distribution and size of their revenues. Section II discusses the findings from the national survey of gambling conducted by NORC for the Commission. Section III presents a preliminary analysis of data available to marketers as well as an initial assessment of marketing plans. The final section of the report discusses the prominent policy issues involved in the legalization and operation of state lotteries. I. Overview and Description Until 1964, lotteries were illegal in every state in this country. Today they are operated in 37 states and the District of Columbia. They are also a worldwide phenomenon: there are 100 countries where lotteries are legal. History Although we mark the beginning of the $modern # lotteries in 1964, when New Hampshire launched its game, lotteries actually enjoy an honored place in American history as a device for raising funds for public purposes. They provided funding for such projects as the Jamestown settlement, Harvard College, and the Continental Army, as well as public works projects throughout the Colonies and early States. Lotteries fell into disrepute after the Civil War, and, following the demise of the scandal-plagued Louisiana Lottery in 1894, they ceased to exist for the next seven decades. Since 1964 their numbers have grown rapidly, along with their popularity. While only 2one other state joined the ranks of lottery states during the 1960s (New York), 12 states adopted lotteries during the 1970s, and another 18 states did so during the 1980s. That only six states adopted lotteries in the 1990s is testament less to waning enthusiasm than to the dwindling number of non-lottery states. As of February 1999, 37 states plus the District of Columbia operated lotteries.3 Growth in Sales As a way of showing how lotteries have grown and evolved over time, Table 1 present