Lottery Statistics and Revenue by State
With jackpots exceeding $1 billion, playing the lottery can seem like an enticing potential shortcut to never again being financially burdened. Unfortunately, the odds of winning billions are remote -- 1 in 292 million for the Powerball jackpot -- and players are more likely to lose their cash than win even small prizes.
Those odds haven't stopped Americans from trying their luck, however. Americans shelled out nearly $95.6 billion on lottery tickets in 2021. That earned a prize payout of $64.3 billion, but that's not evenly distributed among the millions of bettors estimated to play the lottery each year.
The Motley Fool Ascent has broken down lottery revenue by state, prize payouts, and losses per capita in each state, and more.
Key findings
- Total lottery spending: Americans spent approximately $95.6 billion on lottery tickets in 2021.
- Lottery spending per capita: On average, Americans spent $288 per capita in 2021 on lottery tickets.
- Lottery spending by state: Massachusetts residents spent $970 per capita in 2021 on lottery tickets, more than double any other state. North Dakota residents spent the least amount per capita that year among states that have a lottery, just $37.
Lottery income by state and per capita
Americans spent $95.6 billion on lottery tickets in 2021, according to the most recent data from the U.S. Census Bureau.
That comes out to $288 spent on lottery tickets per capita that year, although in reality, a small share of consistent players make up the majority of lottery ticket spending. The most recent polling data shows that roughly 50% of Americans buy a lottery ticket at least once a year and the majority of those only play rarely, when jackpots are enormous.
Florida brought in the most lottery sales in 2021, roughly $8.6 billion. California raked in $8.4 billion while New York and Texas each brought in $7.7 billion.
Massachusetts, despite its relatively small population, had the fifth-highest lottery revenue: $6.8 billion. Massachusetts Lottery Executive Director Mark William Bracken has suggested that one reason the Bay State may punch above its weight, in terms of lottery sales, is due to residents of neighboring states hopping across the border into Massachusetts to take advantage of bigger payouts for the same prices they would pay in their home state.
Massachusetts residents also have among the highest median household incomes in the country, which means they may have more disposable income to spend on lottery tickets.
Lottery prize winnings and losses per capita by state
Massachusetts residents earn $614 in lottery winnings per capita, more than twice as much as any other state. In practice, those winnings are not spread equally among bettors, but are taken home by the sliver of lottery players that are lucky enough to win big. Massachusetts also has the highest loss on lottery tickets per capita, $356.
Lottery income and revenue over time
States took in a record $95.6 billion in lottery sales, paid out $64.3 billion in prizes, and had $26.9 billion in income, in 2021, the most recent year for which data is available. Those are all record highs.
Lottery sales jumped $15.4 billion from 2020 to 2021, the largest increase recorded. Prizes grew by $10.8 billion and income available for states to spend increased by $3.4 billion. Despite that, states have struggled to grow the percent of sales they have available to spend.
Is playing the lottery worth it?
Playing the lottery may appear to be a quick way to get rich, but it's not a wise investment given that the odds of winning the jackpot are usually one in hundreds of millions. Even if you're feeling lucky, it's extremely unlikely you'll win.
Instead of buying lottery tickets in hopes of securing a huge windfall, it's possible to channel that money into products and assets that can increase in value without an aspect of luck. The best high-yield savings accounts offer competitive interest rates that will grow account balances without needing to gamble, for example. Investing through the best brokers offers more upside than savings accounts, albeit with risks.
Not only can the financial costs of playing the lottery add up, it can also take an emotional and psychological toll. On the other hand, money in a high-yield savings account is secured and protected, and other products like CDs and bonds are either no-risk or relatively low-risk, low-worry options to grow wealth.
FAQs
The odds of winning the Powerball jackpot are 1 in 292 million. More specifically, 1 in 292,201,338, according to Powerball.
Experts say it's more likely to be struck by lightning once than to win the Powerball, even if you played every drawing during a lifetime.
About 50% of Americans buy a lottery ticket each year, according to experts and a Gallup poll most recently conducted in 2016.
Academics say that most people who buy lottery tickets do so only when jackpots are enormous. Most spending on lottery tickets is done by 20% to 30% of players that regularly buy tickets.
These are the five largest lottery jackpots won:
- $2.04 billion, Powerball, Nov. 8, 2022.
- $1.586 billion, Powerball, Jan. 13, 2016.
- $1.58 billion, Mega Millions, Aug. 8, 2023.
- $1.537 billion, Mega Millions, Oct. 23, 2018.
- $1.35 billion, Mega Millions, Jan. 13, 2023.
Lottery winnings are taxed by the IRS and most states as income, which means big winners are placed in the highest tax brackets. Non-monetary prizes, like a car or house, are taxed as income at fair market value.
Sources
- Associated Press (2023). "What are the 10 largest US lottery jackpots ever won?"
- Gallup (2016). "About Half of Americans Play State Lotteries."
- National Public Radio (2023). "Here's who really wins and loses in American lotteries."
- Powerball (2023). "Powerball prize chart."
- U.S. Census Bureau (2023). "2021 Annual Survey of State Government Finances Tables: Income and Apportionment of State-Administered Lottery Funds: 2021."
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