StateStats: Lacklu$ter Lotterie$: September 2010 

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In 1964, New Hampshire became the first state in recent history to create a lottery. Fast forward 44 years, and Arkansas becomes the latest state to adopt a lottery after voters approved a ballot question amending the state constitution in November 2008. State lotteries are now authorized in all but seven states.

Over the past two decades, policymakers have turned to lotteries to generate revenue without raising taxes, especially for popular programs such as college scholarship funds or environmental protection. As the effects from the recent recession continue to linger, however, reliance on state lotteries as a stable revenue source is no longer a sure bet.

Lottery revenues declined in FY 2009 in 25 states, the District of Columbia and Puerto Rico. That’s more than 61 percent of all lottery states and territories. Revenues were flat in 10 states and increased in seven. Indiana saw the greatest drop in revenues at -18.1 percent, probably because racinos opened in 2008. North Carolina, where the lottery is relatively new and still expanding, saw the greatest increase, at 17.4 percent.