GAMBLING TAXES: REGRESSIVITY AND REVENUE POTENTIAL

Abstract

A nation-wide sample of adults is used to investigate the degree of regressivity of several types of gambling and to evaluate their revenue potential. Measured on a scale from +1 at the extreme of progressivity to -1 at the extreme of regressivity, gambling taxes as a whole rate —.25, somewhat more regressive than sales taxes, but there is wide variation among types of game. Revenue potential is estimated for individual games, and the prospective revenue from all types combined is, at most, no more than two to five percent of total state and local receipts.