ABSTRACT
The current economic downturn highlights the centrality of state lotteries to public finance. Native American and commercial gaming, the ready availability of Internet gambling, along with lottery market and product maturity have eroded the relative autonomy state lotteries once posed over the American gambling landscape. Despite these challenges, lotteries continue to make a substantial contribution to state governmental coffers, generating $59.6 billion in sales and $19.4 billion in profits during 2012. Despite this outward profitability, a number of administrative and operational challenges confront the future of state lotteries, including privatization of lottery operations, potential saturation of the lottery market, and increased competition for the gambling dollar. State policy makers should continually monitor the administrative and fiscal performance of state lotteries. An appraisal of administrative practices and their subsequent impact on public finance, underscores the problems and prospects confronting state lotteries.
