Where does the Lottery Revenue Go? – What Is It Used for?

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Almost every lottery has a tax on it. The reason for that is that the jackpots might amount to a really huge number. If that happens to be the case, or even otherwise, the country the lottery is played in taxes the winner.

All that money has to go somewhere and the country is likely to use it. What is the money used for? It depends on the country and the lottery.

The United States Lotteries

The Powerball is supposed to have most of its revenue be used for education, emergency responders and the veterans’ health. Not everything is as it seems, however. Some lotteries revenues go into education and the state’s fund for education. More often than not, the funds simply trade places with the state’s education funds and the revenue actually ends up in the state’s general fund.

The Negative Cases

A great example of this is North Carolina. Their lottery revenue increased by 23 million dollars in 2010 while the state’s education spending was reduced by 2,3 billion dollars. This was reported by the Tax Policy Center.

Even though lottery taxes should be relatively transparent, things are not as they seem.

California, Florida, and Michigan were found to substitute their normal levels for lottery revenue, similarly to North Carolina’s case.

Different studies reached different conclusions, more positive ones, like that 37 states which have lotteries spend more money on education than those states without lotteries.

The Positive Cases

In Florida, officials note that the revenue from the lottery goes directly into education and that those results are clearly visible. In their defense, the Bright Futures Scholarship Fund was created from scratch with lottery money.

The Powerball, one of the multi-state lotteries says that their revenue funds benefit many states and that is true in the case of Arizona which got a lot of money in 2017, around 24,7 million dollars.

While the funds went into Arizona’s general fund. But, Arizona’s own lotteries and their revenues find their way to help very specific programs, like those for transportation and parks and conservation in general.

In the case of Colorado, the funds go directly into parks and preservation of open space, as well as recreation. Colorado got a hefty 78 million dollars in 2017.


Whether lotteries actually help the communities of certain countries and states remains to be seen. That does not entirely or at all, in most cases, depend on the lotteries but rather on the country or state which receives the revenue.

Corruption is a real thing and money will find its way into the wrong hands. More often than not, lotteries actually help fund amazing projects, education, and environmental preservation.