Beginning in 1965, voters in Wisconsin have approved five constitutional amendments allowing certain forms of gambling in Wisconsin. Today, the state lottery and tribal gaming generate the most revenue. Since 2001, the state lottery has relieved, on average, about 2% of residential property tax levies. While annual amounts fluctuate, tribes pay the state about $50 million annually to operate casinos in the state.
Thanks to the 1848 constitution, legal gambling has a fairly brief history in Wisconsin. The state’s founders, largely Protestants and Yankees prohibited the legislature from “authorizing any lottery.” The provision was broadly interpreted to ban all forms of gambling, including contests, promotions, and raffles.
In 1965, voters approved a constitutional amendment legalizing promotional contests. Over the ensuing decades, voters ratified additional amendments permitting bingo (1973), raffles (1977), pari-mutuel on-track betting (1987), and a state lottery (1987). A 1993 amendment clarified that all other types of gambling would remain illegal.
At the time the lottery amendment passed, tribal gaming was a small industry nationally. However, that year the U.S. Supreme Court ruled that states regulating certain forms of gambling could not prevent tribes from also offering them. Instead, governments would have to negotiate compacts with tribes, detailing how gaming would function in the state. Thus, when Wisconsin voters authorized a state lottery, they opened the door to tribal casinos.
Years later, gaming remains controversial here. The lottery provides millions of dollars each year in property tax relief, and tribal revenues help pay for state general fund programs. However, compared to other states, our lottery is played relatively less, and the amount of property tax relief it generates is modest. It remains an inefficient and regressive way to generate state revenues.