Thirty-one states earmark at least a portion of the lottery proceeds for a particular government program. Other states use lottery funds to support programs ranging from parks and recreation to police and firefighters pensions. Georgia uses lottery funds for its HOPE college scholarship fund, while Pennsylvania supports a broad range of programs for the elderly. While lotteries provide a relatively reliable revenue source compared to some sources of revenue such as the sales tax, lottery revenues are on the decline as a percentage of total state revenues. For the 29 states operating lotteries in 1989, lottery revenues constituted 3.5 percent of the total but dropped to 1.9 percent by 1997 for those same 29 states.
Experts blame jackpot fatigue and competition from other forms of gambling for the decline.
To keep interest strong, states must continually introduce new games and maintain or even increase their commitment to advertising and marketing. The bottom line is that state lotteries are a very small source of revenue but a fairly reliable source, because if lottery play drops, the states just adopt more aggressive games or step up their marketing, says the Center s McLaughlin. Critics contend that the lottery preys on the poor and uneducated, though lottery advocates dispute this contention vigorously. The Center found that the weight of the evidence shows that lottery play is spread fairly evenly across almost all income groups and that the poor do not participate in lotteries out of proportion to their percentage of the population. However, the poor do spend a higher proportion of their incomes on lottery tickets than do players who earn more.