States Profiting the Most from Sin

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10. Oregon
> Pct. total revenue from sin: 3.0%
> Most profitable sin: Lottery
> Revenue from sin: $1,552,600,000
> Total state revenue: $34,797,285,000

Last month, the Oregon Liquor Control Commission reported record-breaking alcohol sales. Gross sales for the 2011-2013 biennium were $947.8 million, significantly, higher than in previous years. The state claimed these high sales indicate rising prosperity throughout the state. Oregon’s revenue from state-controlled liquor stores was about $438 million in 2011, eighth-highest in the country. Its revenue from alcoholic beverage taxes, however, was comparatively low, at just $16 million, 44th relative to other states. The state’s beer excise tax as of January 2013 was just $0.08 cents to the gallon, tied for fourth lowest in the country. Oregon’s lottery is one of the most lucrative in the country. In 2011, 1.59% of state revenue came from lottery ticket sales, which was the sixth highest percentage in the nation.

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9. South Dakota
> Pct. total revenue from sin: 3.3%
> Most profitable sin: Casinos
> Revenue from sin: $204,293,000
> Total state revenue: $6,017,179,000

A relatively large proportion of South Dakota’s tax revenue came from lottery ticket sales. In 2011, the state brought in $106 million, which accounted for 1.77% of its revenue. The amount the state brings in for casinos may be rising: the South Dakota Gaming Commission reported last month that the amount of cash wagered this year was up from a year ago, possibly due to the bet limit increasing from $100 to $1,000 last year. Compared with other states, South Dakota does not generate very much revenue from taxing liquor or beer.

8. Michigan
> Pct. total revenue from sin: 3.6%
> Most profitable sin: Casinos
> Revenue from sin: $2,292,118,000
> Total state revenue: $64,429,901,000

State-controlled liquor stores in Michigan brought in more than $150 million for the state, more than all but two other states. Tobacco sales brought in even more — $976 million. Tobacco taxes represented 1.52% of state revenue in 2011, the second largest proportion of tobacco on a state’s economy. Michigan is in the top 10 states that tax cigarettes the most — $2.00 for every pack. In spite of Michigan’s financial interests in cigarettes, it is also a state where smoking outside is banned in many places, due to legislation passed in 2009. Recently, there have been attempts to relax that law and create exemptions in the interest of restaurants that might like to allow their customers to smoke in certain areas.

7. Pennsylvania
> Pct. total revenue from sin: 3.7%
> Most profitable sin: Casinos
> Revenue from sin: $3,849,764,000
> Total state revenue: $91,705,305,000

Although the state has one of the lowest taxes on beer in the country, alcoholic beverage taxes in Pennsylvania brought in $307 million in 2011, the sixth highest amount that year. The state also brought in another $81 million from liquor stores it regulates. Recently, Pennsylvania’s state senate voted to privatize liquor distribution in the state, a vote that also would allow beer distributors to sell liquor, while expanding the types of locations where beer and wine may be sold. However, the bill eventually died before it could be passed. In addition to alcohol, gambling is also a major source of government revenue. Pennsylvania lead led the nation in total revenue raised from gambling in 2011.

6. Indiana
> Pct. total revenue from sin: 4.0%
> Most profitable sin: Casinos
> Revenue from sin: $1,552,600,000
> Total state revenue: $38,894,976,000

Relative to its total budget, Indiana raised less revenue from alcohol than 40 other states in 2011. Indiana’s taxes on cigarettes were among the lowest in the nation, at under a dollar per 20-pack. Residents were more likely to smoke than most Americans, however. More than one-quarter of Hoosiers told Gallup pollsters they smoked, versus just over 20% nationwide. This higher rate of smoking may have led to the state collecting $470 million from tobacco taxes in 2011, which amounted to a relatively high 1.21% of its revenue. However, the state’s real proceeds from sin came from its casinos. In 2011, Indiana generated more than $800 million in casino tax revenue. Gaming revenue has increased in Indiana, particularly after riverboat gambling was legalized in Indiana five years ago.