Wisconsin's Lottery Tax Credit Isn't Funded by the Lottery Alone
Summary
Wisconsin's constitution says net lottery proceeds alone fund the state's property-tax credit. A state financial audit shows the Lottery Fund has taken in ordinary tax dollars for three straight fiscal years instead -- $72.9 million, $88.7 million, then $83.4 million -- even as the Lottery's own operations turned a $217 million profit before any of that money arrived. The credit itself still fell 13.7%, to $315.2 million, a decline the audit attributes entirely to lower ticket sales. Lawmakers have already authorized a reduced version of the same transfer, $86.2 million a year, through fiscal 2027.
A transfer with only a two-year paper trail
Only two of those three years come with an explanation. Note 12 of the audit's financial statements ties $88.7 million in FY2023-24, and an identical $88.7 million authorized for FY2024-25, directly to 2023 Wisconsin Act 19, the 2023-25 biennial budget, which directed the money specifically to retailer compensation and vendor fees. The actual amount that moved in FY2024-25 came in at $83.4 million, slightly under the authorization, because lower ticket sales meant lower retailer-commission costs to cover. What the audit doesn't explain is the $72.9 million that moved into the Lottery Fund the year before that, in FY2022-23 -- the same line item, at a similar scale, with no statute cited. Whatever authorized it, routing general tax revenue into the Lottery Fund didn't start with the 2023 budget; Act 19 continued and specified something already underway.
View data as table
| FY2022-23 | $72.9M | origin not stated in the audit |
|---|---|---|
| FY2023-24 | $88.7M | Act 19 authorized |
| FY2024-25 | $83.4M | Act 19 authorized; actual |
Where the money actually goes
The transfer doesn't fund the property-tax credit directly. It pays two specific Lottery operating costs -- retailer commissions and vendor fees -- freeing more of the Lottery's own ticket-sale proceeds to flow out to the Lottery and Gaming Tax Credit instead. The audit is explicit that this increased, rather than reduced, the net proceeds technically available for the credit in FY2024-25. It reads as a structural choice about which pool of money -- general tax revenue or gambling proceeds -- pays which bill, not a rescue of a money-losing program: the Lottery's net income before any transfers was $217.0 million in FY2024-25, down from $262.7 million the year before, but still comfortably in the black.
The credit fell anyway -- and the audit says why
Even with the general-fund transfer, the Lottery and Gaming Tax Credit fell 13.7%, from $365.4 million in FY2023-24 to $315.2 million in FY2024-25. The audit's own explanation doesn't point to the transfer at all -- it attributes the entire drop to lower than anticipated ticket sales, driven by smaller Powerball and Mega Millions jackpots that year. Ticket sales fell 9.7%, from $954.8 million to $861.8 million. The $83.4 million general-fund transfer is equivalent to about a quarter of the credit it helped fund that year -- a meaningful sum, moving through a program whose founding premise is that lottery players, not taxpayers generally, cover the cost.
View data as table
| FY2020-21 | $236.3M | |
|---|---|---|
| FY2021-22 | $340.2M | |
| FY2022-23 | $319.7M | +$72.9M general-fund transfer |
| FY2023-24 | $365.4M | +$88.7M general-fund transfer |
| FY2024-25 | $315.2M | +$83.4M general-fund transfer |
Locked in through 2027
The transfer isn't going away. 2025 Wisconsin Act 15, the 2025-27 biennial budget, trimmed the annual amount to $86.2 million -- $61.9 million for retailer compensation, $24.4 million for vendor fees -- but extended it through FY2026-27. That's another $172.4 million in authorized general-fund support already on the books, on top of the $245.0 million already transferred over the three fiscal years the audit's own tables cover. Whatever share of a Wisconsin lottery ticket goes to property tax relief, a meaningful part of what keeps the retailers and vendors paid now comes from the same general tax base that funds everything else the state does.
The takeaway
- Wisconsin's lottery-funded tax credit isn't purely lottery-funded. The Lottery Fund has received general-fund transfers -- ordinary tax dollars -- for at least three straight fiscal years: $72.9 million (FY2022-23), $88.7 million (FY2023-24), and $83.4 million (FY2024-25), with only the latter two tied to a specific budget act, 2023 Wisconsin Act 19.
- The Lottery wasn't in financial trouble. Its own operations produced $217.0 million in profit before any transfers in FY2024-25 -- the general-fund money pays specific costs (retailer commissions, vendor fees) so more Lottery proceeds can flow to the tax credit, not to keep the Lottery itself afloat.
- The property tax credit fell 13.7% anyway, from $365.4 million to $315.2 million, a decline the audit attributes entirely to a 9.7% drop in ticket sales -- smaller Powerball and Mega Millions jackpots, not the general-fund transfer.
All figures are from the Wisconsin Legislative Audit Bureau's Wisconsin Lottery, Fiscal Year 2024-25 (Report 26-04), a financial audit transmitted April 14, 2026, read in full via direct PDF fetch and pdftotext extraction. An archive.org Save Page Now capture of the report succeeded on the first attempt.
The $245.0 million three-year transfer total, the $172.4 million forward-authorized total, and the transfer's roughly 26.5% scale relative to the FY2024-25 tax credit are this outlet's own arithmetic on the audit's own separately stated figures (methods and caveats in analysis.json); the audit does not itself state these combined totals or ratios, and none of them imply the transfer caused or failed to prevent the credit's decline -- the audit attributes that decline solely to lower ticket sales. A blind adversarial verifier, working from the primary document alone with no access to this draft, independently checked every itemized fact, including cross-checking the causal framing against the audit's own text; see verification.json.
Sources(1) ▾
- Wisconsin Legislative Audit Bureau, Wisconsin Lottery, Fiscal Year 2024-25 (Report 26-04) (2026-04-14) — The state's annual financial audit of the Wisconsin Lottery, administered by the Department of Revenue. Source for ticket sales and operating expense trends, the FY2023-24/FY2024-25 general-purpose-revenue (GPR) transfers to the Lottery for retailer compensation and vendor fees, the five-year Lottery and Gaming Tax Credit history, the FY2023-24 through FY2026-27 GPR funding schedule (Table E), and Note 12's confirmed actual transfer amounts. legis.wisconsin.gov · original document
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The Wisconsin Constitution makes one promise about the state lottery: net proceeds go exclusively to property tax relief for Wisconsin residents. What it doesn't mention is money moving the other way. The Wisconsin Legislative Audit Bureau's fiscal 2025 financial audit of the Lottery shows the Lottery Fund has received a "Transfers In—General Fund" credit -- ordinary tax dollars, not lottery proceeds -- in each of the past three fiscal years: $72.9 million in FY2022-23, $88.7 million in FY2023-24, and $83.4 million in FY2024-25. The money is earmarked for retailer commissions and vendor fees, costs the Lottery's own ticket-sale proceeds have always covered. It didn't happen because the Lottery was struggling -- its own operations turned a $217.0 million profit before any of that money arrived in FY2024-25 alone.