Lottery Taxes


Dutch lotteries were widespread in the seventeenth century, raising money for the poor and various other public purposes. Popularity grew and lotteries were hailed as a new and painless way to tax the population. The oldest running lottery, the Staatsloterij, was established in 1726. The word lottery comes from the Dutch noun, loter, which means “fate.”

Tax-free payouts

If you’ve won the lottery, you can usually take your winnings tax-free. However, some jurisdictions require you to have a lottery license to play. Even if your winnings are less than the advertised jackpot, you can still choose to receive annuity payments instead of receiving the full amount of money.

Addiction hazards

One way to reduce gambling risks is to encourage state-sponsored lotteries. These activities are relatively painless, raising funds for good causes while providing pleasure to those who enjoy occasional gambling. However, these activities also expose a relatively small segment of the population to the hazards of gambling, including excessive gambling and addiction.

Alternative revenue sources

There are several ways to boost lottery revenues. These methods may include raising or lowering the implicit tax rate, introducing new games or products, or increasing the ticket price. In some states, a portion of the ticket price goes directly to the state’s coffers. Another option is to introduce video lottery terminals and change the ticket price based on desired revenue rather than market value.


A new report on the costs of the lottery’s promotional efforts has been released. The new figures include costs incurred for producing television and radio programs promoting the lottery. The Lottery is currently spending about $1.2 million per year on these productions. These programs are distributed mainly on public access cable stations, and the television portion of the program is broadcast on some commercial stations. While the exact amount of these expenditures is not available, the producer of the Environmental Journal has estimated the cost for these television and radio spots.


In the past several years, lottery commissions have increased. However, the state gaming commission has said that any change in lottery agent compensation must be evaluated carefully. Nonetheless, lottery agents argue that the increased commissions will increase their profit margin per transaction. In the near future, they plan to lobby state lawmakers to include the new commissions in their compensation packages.