IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v21y1993i2p123-140.html
   My bibliography  Save this article

The Cross Effects of Lottery Taxes On Alternative State Tax Revenue

Author

Listed:
  • Mary O. Borg

    (University of North Florida)

  • Paul M. Mason

    (University of North Florida)

  • Stephen L. Shapiro

    (University of North Florida)

Abstract

This article both theoretically and empirically identifies sizable cross effects of lottery taxes on other sources of state tax revenue. Specifically, those states without income taxes and those with high sales and excise tax rates may lose as much as 23 cents in alternative state revenue for every dollar of lottery revenue they collect. Even though this extreme still implies that the state receives 77 cents more tax revenue than before the lottery was imposed, those states that earmark their lottery dollars likely see significant reductions in their nonlottery revenue sources that need to be accounted for in their budgets. Otherwise, a bonanza in one area of the budget causes a sizable and likely unexpected shortfall elsewhere.

Suggested Citation

  • Mary O. Borg & Paul M. Mason & Stephen L. Shapiro, 1993. "The Cross Effects of Lottery Taxes On Alternative State Tax Revenue," Public Finance Review, , vol. 21(2), pages 123-140, April.
    • Handle: RePEc:sae:pubfin:v:21:y:1993:i:2:p:123-140
    DOI: 10.1177/109114219302100201
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114219302100201
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114219302100201?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Charles T. Clotfelter & Philip J. Cook, 1989. "Selling Hope: State Lotteries in America," NBER Books, National Bureau of Economic Research, Inc, number clot89-1, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Di Bella, Enrico & Gandullia, Luca & Leporatti, Lucia, 2015. "The Impact of Gambling on Government Budget: A European Comparison with a Focus on Italy - L’impatto del gioco d’azzardo sul bilancio dello stato: un confronto europeo e analisi del contesto italiano," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 68(2), pages 187-212.
    2. Andrew Worthington & Kerry Brown & Mary Crawford & David Pickernell, 2007. "Gambling participation in Australia: findings from the national Household Expenditure Survey," Review of Economics of the Household, Springer, vol. 5(2), pages 209-221, June.
    3. Melissa S. Kearney, 2005. "The Economic Winners and Losers of Legalized Gambling," NBER Working Papers 11234, National Bureau of Economic Research, Inc.
    4. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2269-2299, December.
    5. Donald S. Elliott & John C. Navin, 2002. "Has Riverboat Gambling Reduced State Lottery Revenue?," Public Finance Review, , vol. 30(3), pages 235-247, May.
    6. Garrett, Thomas A. & Coughlin, Cletus C., 2009. "Inter–Temporal Differences in the Income Elasticity of Demand for Lottery Tickets," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(1), pages 77-99, March.
    7. repec:rre:publsh:v:37:y:2007:i:2:p:169-85 is not listed on IDEAS
    8. Stephen Fink & Alan Marco & Jonathan Rork, 2004. "Lotto nothing? The budgetary impact of state lotteries," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2357-2367.
    9. Thomas A. Garrett & Natalia A. Kolesnikova, 2010. "Local price variation and the tax incidence of state lotteries," Working Papers 2010-035, Federal Reserve Bank of St. Louis.
    10. Andrew C. Worthington & Kerry Brown & Mary Crawford & David Pickernell, 2003. "Socioeconomic And Demographic Determinants Of Household Gambling In Australia," School of Economics and Finance Discussion Papers and Working Papers Series 156, School of Economics and Finance, Queensland University of Technology.
    11. Andrew C. Worthington, 2001. "Implicit Finance in Gambling Expenditures: Australian Evidence on Socioeconomic and Demographic Tax Incidence," Public Finance Review, , vol. 29(4), pages 326-342, July.
    12. Thomas A. Garrett, 2011. "A closer look at the tax incidence of instant lottery games: an analysis by price point," Working Papers 2011-010, Federal Reserve Bank of St. Louis.
    13. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    14. Brown, Ryan P. & Rork, Jonathan C., 2005. "Copycat gaming: A spatial analysis of state lottery structure," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 795-807, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas A. Garrett & Russell S. Sobel, 2004. "State Lottery Revenue: The Importance of Game Characteristics," Public Finance Review, , vol. 32(3), pages 313-330, May.
    2. Robin Maximilian Stetzka & Stefan Winter, 2023. "How rational is gambling?," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1432-1488, September.
    3. Glenn P. Jenkins & Chun-Yan Kuo, 2004. "The Taxation and Regulation of Casino’s and Games of Chance in the Dominican Republic," Development Discussion Papers 2004-07, JDI Executive Programs.
    4. von Meduna, Marc & Steinmetz, Fred & Ante, Lennart & Reynolds, Jennifer & Fiedler, Ingo, 2020. "Loot boxes are gambling-like elements in video games with harmful potential: Results from a large-scale population survey," Technology in Society, Elsevier, vol. 63(C).
    5. Skidmore, Mark & Serkan Tosun, Mehmet, 2008. "Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(1), pages 1-11.
    6. David R. Just & Hope C. Michelson, 2007. "Wealth as Welfare: Are Wealth Thresholds behind Persistent Poverty?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 419-426.
    7. Brown, Ryan P. & Rork, Jonathan C., 2005. "Copycat gaming: A spatial analysis of state lottery structure," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 795-807, November.
    8. Nichols, Mark W. & Tosun, Mehmet Serkan, 2017. "The impact of legalized casino gambling on crime," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 1-15.
    9. Harriet A. Stranahan & Mary O. Borg, 2004. "Some Futures are Brighter than Others: the Net Benefits Received by Florida Bright Futures Scholarship Recipients," Public Finance Review, , vol. 32(1), pages 105-126, January.
    10. Ghent, Linda S. & Grant, Alan P., 2010. "The Demand for Lottery Products and Their Distributional Consequences," National Tax Journal, National Tax Association;National Tax Journal, vol. 63(2), pages 253-268, June.
    11. Ursula Hauser‐Rethaller & Ulrich König, 2002. "Parimutuel Lotteries: Gamblers' Behavior and the Demand for Tickets," German Economic Review, Verein für Socialpolitik, vol. 3(2), pages 223-245, May.
    12. David Forrest, 2008. "Gambling Policy in the European Union: Too Many Losers?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(4), pages 540-569, December.
    13. repec:ebl:ecbull:v:8:y:2003:i:10:p:1-8 is not listed on IDEAS
    14. Spencer, Michael A. & Swallow, Stephen K. & Shogren, Jason F. & List, John A., 2009. "Rebate rules in threshold public good provision," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 798-806, June.
    15. Sarah Brown & Andy Dickerson & Jolian McHardy & Karl Taylor, 2010. "Gambling and the use of credit: an individual and household level analysis," Working Papers 2010005, The University of Sheffield, Department of Economics, revised Feb 2010.
    16. William R. Eadington, 1999. "The Economics of Casino Gambling," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 173-192, Summer.
    17. Elizabeth A. Freund & Irwin L. Morris, 2005. "The Lottery and Income Inequality in the States," Social Science Quarterly, Southwestern Social Science Association, vol. 86(s1), pages 996-1012, December.
    18. Fiedler, Ingo & Kairouz, Sylvia & Costes, Jean-Michel & Weißmüller, Kristina S., 2019. "Gambling spending and its concentration on problem gamblers," Journal of Business Research, Elsevier, vol. 98(C), pages 82-91.
    19. Thomas A. Garrett, 2012. "The Distributional Burden of Instant Lottery Ticket Expenditures," Public Finance Review, , vol. 40(6), pages 767-788, November.
    20. Jon D. Wisman, 2006. "State Lotteries: Using State Power to Fleece the Poor," Journal of Economic Issues, Taylor & Francis Journals, vol. 40(4), pages 955-966, December.
    21. Zikmund-Fisher, Brian J. & Parker, Andrew M., 1999. "Demand for rent-to-own contracts: a behavioral economic explanation," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 199-216, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:21:y:1993:i:2:p:123-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.