Special Report

States Profiting the Most From Sin

Fountain, Detroit, Michigan
Source: Thinkstock

9. Michigan
> Pct. total revenue from sin: 3.4%
> Most profitable sin: Tobacco use
> Revenue from sin: $2.33 billion (7th highest)

Of Michigan’s $68.9 billion in annual revenue, $2.3 billion, or 3.4%, came from taxes on alcohol and tobacco and sales of lottery tickets, as well as other so-called sinful purchases. Tobacco taxes contribute the most to the state’s revenue from sin. The high revenue is partially due to high taxes, as well as high consumption. Michigan taxes cigarettes at $2 per pack, tied with five other states for the 11th highest tobacco tax. Despite the relatively high tobacco tax rate, Michigan’s adult smoking rate is higher than the national smoking rate of 17%. At 21.2%, it is ninth highest of all states.

Baltimore, Maryland - Inner Harbor
Source: Thinkstock

8. Maryland
> Pct. total revenue from sin: 3.4%
> Most profitable sin: Lottery
> Revenue from sin: $1.53 billion (12th highest)

Like most states and the nation as a whole, profits from lottery ticket sales pad Maryland’s government coffers more than any other sin-related revenue source. Profit from lotteries in the state totalled nearly $880 million in fiscal 2014, the ninth largest such profit of any state. Casinos brought in revenue of more than $1 billion in Maryland’s fiscal 2015, setting a new record. Casinos are relatively new in the state and are growing in popularity. Hollywood Casino Perryville, the state’s first, opened in 2010, and Maryland Live in Anne Arundel County opened in 2012. Another casino is planned for 2016.

Indianapolis Downtown, Indiana, USA
Source: Thinkstock

7. Indiana
> Pct. total revenue from sin: 4.0%
> Most profitable sin: Casino taxes
> Revenue from sin: $1.56 billion (11th highest)

Indiana is one of only two state on this list where tobacco is taxed at less than $1 per pack. However, due to the state’s high adult smoking rate of 22.9%, the seventh highest rate compared with other states, Indiana’s tax revenue from tobacco sales is still relatively high. Taxes from tobacco sales added $447.6 million to government coffers in 2014, or 1.1% of total revenue — the 10th largest such share of all states. Casinos in the state generated considerably more revenue for the state than tobacco. Tax revenue at gaming venues totalled $806.6 million, or 2.0% of state revenue — the fifth largest such share of all states.