OLR Research Report


December 4, 2008

 

2008-R-0672

LOTTERY REVENUE

By: Veronica Rose, Principal Analyst

You asked for general information on the state lottery, including (1) how much revenue the state gets from the lottery, (2) whether the revenue is earmarked for specific purposes, and (3) whether the revenue was ever used to fund education.

SUMMARY

The statewide lottery was legalized in 1971. Lottery operations began in 1972 with a weekly game. Today, there are daily and instant games, Lotto, Cash Lotto, and Powerball.

In FY 08, the state received $283 million in revenue from the state lottery (see Attachment 1). All the revenue is deposited in the state's General Fund. Of this, $1.5 million annually is earmarked for the Chronic Gamblers Treatment and Rehabilitation Fund.

From 1975 to 1977, the revenue from instant games funded education equalization grants. In 1976, $1 million of the revenue from daily games was allocated to an emergency food relief program for persons eligible to get benefits under the Aid for Dependent Children (AFDC) program.

LOTTERY HISTORY

PA 865 legalized a statewide lottery in 1971, and the first game was offered in 1972. Initially, the Commission of Special Revenue (later renamed the Division of Special Revenue), administered the lottery. Since July 1, 1996, it has been administered by the Connecticut Lottery Corporation (CLC), a quasi-government corporation.

Lottery Games

The first lottery game was a weekly game, which was discontinued in 1985. The instant game was introduced in 1975 pursuant to PA 75-344. A daily game was introduced in 1977; Lotto, in 1983; Cash Lotto in 1992; and Powerball in 1995.

Revenue

PA 75-344 required daily and instant game revenue to be deposited in the General Fund and used for education equalization grants. The revenue was used for this purpose from 1975 to 1977, when PA 77-540 terminated the requirement. PA 76-387 required that $1 million of the daily game revenue be allocated to an emergency food relief program for persons eligible for AFDC program benefits. This requirement was eliminated in 1977 (PA 77-517).

A 1996 public act (PA 96-212) required CLC annually to transfer $250,000 of lottery revenue to the Chronic Gamblers Fund for compulsive gambling treatment and education programs. PA 98-250 increased the amount to $500,000; PA 99-173 increased it to $850,000; and PA further increased it to $1.25 million. Currently, the law requires $1.5 million to be transferred to this fund (CGS 12-818).

Table 1 shows the amount deposited annually in the General Fund since the lottery's inception.

ATTACHMENT 1

TABLE 1: LOTTERY GENERAL FUND TRANSFERS

Fiscal Year

General Fund Transfer (Million $)*

1971-72

$8.1

1972-73

16.5

1973-74

16.0

1974-75

15.0

1975-76

31.9

1976-77

25.3

1977-78

41.8

1978-79

43.1

1979-80

54.5

1980-81

57.6

1981-82

71.0

1982-83

80.5

1983-84

105.5

1984-85

148.8

1985-86

190.8

1986-87

216.1

1987-88

225.0

1988-89

219.7

1989-90

227.7

1990-91

228.6

1991-92

221.3

1992-93

221.8

1993-94

217.3

1994-95

249.6

1995-96

262.0

1996-97

251.5

1997-98

264.3

1998-99

271.3

1999-00

253.6

2000-01

252.0

2001-02

271.5

2002-03

256.8

2003-04

280.8

2004-05

268.5

2005-06

284.9

2006-07

279.0

2007-08

283.0



Source: Office of Fiscal Analysis

*Beginning with the 1996-97 fiscal year, revenue transferred to the General Fund does not include operating expenses. Before that, revenue was transferred before operating expenses.

VR:ts