State Lotteries

Report Outline
Special Focus

Overview

14–17-22–23-30–47. That was the combination of numbers that in August 1985 unlocked a record $41 million lottery jackpot in New York. A player's chances of winning such a jackpot are astronomically poor; he is more likely to be struck by lightning. And yet some people, of course, do win. While 23 New Yorkers shared in that prize, Michael Wittkowski, a 28-year-old printer from Chicago, is the biggest single winner to date. He won $40 million in a 1984 Illinois lottery in which 31.7 million tickets were sold.

Individuals aren't the only ones playing the lotto-type games whose multimillion-dollar jackpots have been generating excitement during the 1980s. States also have a big stake in the action. Strapped for revenue and reluctant to impose added taxes, more than half the states have now approved lotteries as a relatively painless and popular revenue-raising device. The typical state lottery puts about half of gross sales into prizes, spends about 15 percent on advertising and other expenses and nets about 35 percent in revenues. Some states earmark all or part of their net revenues for education, conservation, programs for the elderly or other specific purposes.

The total amount of money bet in state lotteries—the “handle,” in gambling parlance—grew between 1982 and 1985 at a faster rate than any other sector of the nation's $190 billion gambling economy, according to Gaming & Wagering Business, a trade magazine. People in lottery states and the District of Columbia spent about $90 per capita on lottery tickets last year.