West Virginia State Coffers Win Big in Video Lottery

June 13, 2008

State-run lotteries are big business, bringing in over $50 billion a year in consumer spending. An increasing portion of this revenue comes from video lottery terminals, or VLTs. VLTs are games of chance such as poker, slots or blackjack played on a video screen. Each terminal is attached to a central computer, which determines the winners.

Just like regular lottery tickets, VLTs constitute an implicit tax. In one way they are even more problematic than regular lottery games: they’re so similar to games offered in casinos that many players may not even be aware that they’re playing the lottery—and paying an implicit tax—when they use VLTs. When people think of playing the lottery, they generally think of scratching a ticket or waiting to check the winning numbers in the newspaper, not playing slots at the track. This further decreases the transparency of the tax.

West Virginal is one of the six states that currently offer VLTs as part of the state lottery. A recent report from WSAX News in West Virginia explains just how big a business video lottery is in the Mountain State. Click here to watch the video.

Click here to read the Tax Foundation Background Paper Gambling with Tax Policy: States’ Growing Reliance on Lottery Tax Revenue.

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