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Money is money, it's not like they can track it. You can probably buy a gun with welfare money. I'd wager that most people spend it on bills.
Unfortunately, this isn't always the case. I worked with a friend at a "volunteer" bingo hall a few times, and one of the regulars was a woman with 8 children who spent almost her entire welfare check on gambling of some sort.
You know, that whole "I need money, so I'm going to by 100 lottery tickets and hope that one is a winner" mentality. Personally, I think it was best said as, "the best way to double your money is to fold it in half and put it in your pocket."