Special Report

States Profiting the Most From Sin

Source: Thinkstock

9. Florida
> Pct. total revenue from sin: 3.7%
> Most profitable sin: Lottery
> Revenue from sin: $3.35 billion (4th highest)
> Population 18 and older: 79.8% (5th highest)

Some 3.7% of Florida’s $91.56 billion fiscal 2015 revenue came from taxes on alcohol and tobacco, sales of lottery tickets, and gaming taxes from casinos. In comparison, sin taxes averaged only about 2.5% of total revenue across all states. Floridians bought $5.28 billion in lottery tickets in 2015, more than in all but two other states. After subtracting administrative costs and winnings, lottery ticket proceeds brought in $1.49 billion, making lottery tickets the largest source of Florida’s total sin tax revenue of $3.35 billion.

Despite a lower than average adult smoking rate, tobacco taxes accounted for 1.3% of Florida’s total revenue — a larger share than in all but six other states. Tobacco sales closely trailed lottery tickets as the biggest boon for state coffers. Revenue from tobacco taxes alone amounted to $1.19 billion in 2015.

Source: Thinkstock

8. Pennsylvania
> Pct. total revenue from sin: 3.8%
> Most profitable sin: Casino tax
> Revenue from sin: $3.50 billion (3rd highest)
> Population 18 and older: 79.0% (8th highest)

Though Pennsylvania has the sixth largest population, its 2015 sin tax revenue of $3.50 billion was the third highest of all states. Pennsylvania profits immensely from casinos. The Keystone State’s tax revenue from casinos of $1.38 billion was more than any state, including Nevada. Since gambling was legalized in the state in 2006, revenues at the state’s 12 casinos totaled $21.23 billion from slot machines and $4.66 billion from table games. State residents are also taxed on out-of-state gambling winnings.

Following legislation signed by Pennsylvania Gov. Tom Wolf last year, cigarette taxes rose by a dollar a pack in order to meet annual budget obligations. The current excise tax on cigarettes in the state, at $2.60 per pack, is 10th highest of all states.

7. South Dakota
> Pct. total revenue from sin: 4.2%
> Most profitable sin: Lottery
> Revenue from sin: $205.0 million (9th lowest)
> Population 18 and older: 75.6% (9th lowest)

South Dakota’s total revenue was only $4.88 billion in 2015, the least of any state in the country. With $205.0 million of those tax dollars coming from tobacco, alcohol, and casino taxes, as well as proceeds from state lotteries, South Dakota collected more in sin taxes than eight other states. Taxes on lottery ticket sales alone accounted for 2.3% of the state’s total revenue, more than double the typical share states derive from lotteries.

Tobacco sales tax accounted for 1.3% of the state’s total 2015 revenue, versus the 0.8% share nationwide. The state’s excise tax on cigarettes is not especially high, so the higher tobacco revenue is likely due in part to the relatively high tobacco consumption. About 20% of adults in the state are smokers, compared to 18% of adults nationwide.