How much revenue will lottery provide?

By Steve Wilson
July 25, 2019

The biggest question about the new Mississippi Lottery is how much revenue it will generate for state government.

Comparing to lotteries in two states with similar populations, Arkansas and Kansas, show that the Mississippi Lottery Corporation could generate between $75.2 million (three-year average for Arkansas) and $114 million (three-year average for Kansas) for state coffers. 

“I like to tell people if you’re a fan of the lottery, the bad news is we’re the 45th state to enact it,” said Gerard Gibert, who is Vice Chairman of the Mississippi Lottery Corporation board of directors. “The good news, we’ve got 44 other states to draw from as we build out the environment.”

Gibert said he thinks that the lottery will generate about $400 million annually in gross revenue. He also said the board is targeting December 1 as the on-sale date for its first tickets, a date he says is subject to change.

Using the three-year average of percent of transfers to the state treasury from gross revenue ($516,236,822 in 2019)from Arkansas (18.78 percent), $400 million in gross revenues for the Mississippi lottery would add up to about $75.2 million annually. 

Over the last three years, Tennessee’s lottery has sent about 25 percent of its revenue ($1.16 billion in 2018) to the state treasury. If this is the case in Mississippi, that’d be about $100 million in revenue for taxpayers annually.

Kansas has averaged about 28.57 percent of its gross sales ($268,948,805 in 2018) generated as revenue for the state in the past three years and using this model would yield about $114 million annually.

While the law says a minimum of 50 percent of the Mississippi lottery’s revenues will be awarded as prizes, Gibert said that amount might go up to 55 percent. Kansas has averaged 58.18 percent of its revenues going to prizes, while Arkansas has sent about 68 percent of its gross revenues to prize winners. 

Tennessee awarded 63.79 percent ($1.039 billion) of its $1.616 billion in revenues to prize winners.

Gibert said the lottery corporation is primarily a sales organization and that its primary goal to maximize revenue for the state using a carefully crafted lineup of instant and online games.

By law, the lottery is supposed to provide the first $80 million in revenues for the State Highway Fund, with the excess going to the Education Enhancement Fund. Retailers will receive a six percent commission.

Gibert says that Arkansas presents the easiest comparison for Mississippi. In the last three fiscal years, the Arkansas Scholarship Lottery has enjoyed increasing revenues with an average of $91 million being transferred to the state in the form of college scholarships.

In the last three years, 81.5 percent of the lottery’s revenues went to expenses, such as prizes, advertising and commissions for retailers. 

In comparison, the Arkansas lottery awarded 67.7 percent of its gross revenue in the form of prizes in fiscal 2019. Arkansas pays a five percent commission to retailers and has 1,915 retailers selling lottery tickets at present.

Arkansas lottery revenues

YearOperating revenuesExpensesTransfers to state
2017$449,916,736$366,200,412 $85,157,060 
2018$500,490,328 $409,282,265 $91,844,929 
2019$516,236,822 $421,293,599 $98,411,747

Another comparison would be Kansas, which has a similar population and is predominately rural. 

The Kansas lottery was started in 1988 and it has averaged about $78 million per year returned to the state treasury. Net sales for Kansas have averaged between $244 million and $268 million in the last five years.

Kansas pays a five percent commission to retailers.

Kansas lottery revenues

Fiscal yearNet salesGame prizeTransfers to state
1988$65,804,532 $30,123,006 $11,343,321 
1989$68,188,022 $33,755,427 $24,500,950 
1990$64,530,640 $28,941,942 $19,259,917 
1991$70,206,003 $32,800,224 $19,453,470 
1992$77,147,506 $37,304,320 $27,147,019 
1993$114,499,165 $58,865,299 $32at629,372 
1994$152,292,802 $79,390,419 $47,888,013 
1995$177,074,245 $92,074,812 $53,246,818 
1996$182,113,628 $96,088,069 $58,114,547 
1997$185,356,681 $99,351,785 $56,658,134 
1998$192,017,310 $101,688,863 $60,304,388 
1999$198,920,985 $107,079,089 $59,333,464 
2000$192,560,800 $104,377,074 $59,646,911 
2001$184,727,159 $97,938,088 $56,535,258 
2002$190,083,880 $98,963,631 $60,494,603 
2003$202,942,874 $107,660,534 $62,500,000 
2004$224,457,166 $120,775,874 $70,217,944 
2005$206,720,771 $112,554,879 $65,409,441 
2006$236,045,945 $131,004,556 $67,088,609 
2007$239,955,044 $133,975,947 $71,016,098 
2008$236,667,471 $132,970,457 $70,046,954 
2009$230,505,668 $130,911,165 $68,187,612 
2010$235,414,168 $132,427,895 $69,026,898 
2011$232,372,510 $132,332,017 $70,010,541 
2012$246,144,512 $138,903,876 $72,000,000 
2013$244,764,848 $138,554,999 $74,500,000 
2014$245,708,290 $138,741,873 $74,291,352 
2015$250,025,840 $144,914,052 $75,020,240 
2016$272,017,364 $157,300,767 $78,205,450 
2017$258,030,943 $149,709,855 $75,255,881 
2018$268,948,805 $157,890,979 $74,726,543 
TOTALS $5,677,558,908 $3,100,857,236 $1,708,355,435 
10 yr. avg.$247,327,311 $141,332,540 $72,842,861 

Gibert says one of the goals of the Mississippi state lottery corporation’s board is to have extensive oversight over its finances. The lottery will be subject to audits from both the state auditor’s office and an external CPA firm. The corporation will also hire an internal auditor.

The lottery was authorized by an amendment to the state’s constitution in 1994, but it took until the 2018 special session of the Legislature for the legislation to make it to the governor’s desk for signature. It was part of a multi-million infrastructure improvement package.

The only prohibitions on vending for the lottery is at Mississippi rest areas and for stores exclusively devoted to selling lottery tickets.


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