How does Alabama, which has no lotteries, rank 10th in lottery scams?

New research from the Federal Trade Commission found that Alabama ranked 10th in the US for citizen exposure to lottery scams in 2024.

Alabama has no state lottery whatsoever, raising eyebrows about the statistic.

Fraud is on the rise

The FTC report, called Consumer Sentinel Network Data Book 2024, broke down types of fraud and where they occur in the United States. The commission reported an increase in overall fraud reports since 2023, with 6.5 million cases reported. 

The top three types of fraud in 2024 included credit bureau fraud, identity theft, and imposter scams.  The report also found that $12.5 billion was lost to fraud in 2024.

Prize, sweepstakes, and lottery frauds

Lower on the categories list are prize, sweepstakes, and lottery frauds, but these losses were still substantial.

Throughout the U.S., victims reported 97,350 scams in this category, losing $351 million total, with a median of $1,000 in losses.

Typically, these frauds look like emails, texts, or snail mail that claim the recipient has won a massive lottery prize. However, in order to obtain the prize, they must submit personal information or even pay money for “fees.” Scammers may then use the victim's personal information for identity theft, make purchases, take their money, and disappear.

The Alabama anomaly

In Alabama, two percent of the state's fraud reports fall in the prize, sweepstakes, and lotteries category. This seems low - but when the numbers are isolated, they tell a different story.

Vegas Insider analyzed the annual reports and broke down the category by state, finding that Alabama ranked 10th in “victim impact,” a score that combined financial losses and reports over the past five years. According to the analysis, between 2020 and 2025, Alabamians lost almost $19 million to prize, sweepstakes, and lotteries fraud, reporting it 2,569 times per million residents.

Alabama is one of five states that has no state lottery, so this can seem like a puzzle. On the one hand, if there's no state lottery, scammers are free to use any messaging or iconography they please - there's nothing to compare it to.

However, there are four other states with no lotteries that didn't make it into the top 10: Alaska, Hawaii, Nevada, and Utah. In fact, most of the states on the analysis's top 10 list have a strong lottery culture: Florida is number 1 in victim impact for lottery scams, followed by North Carolina and California.

So, why Alabama?

One explanation is faith. According to the Vegas Insider analysis, faith-based charities and sweepstakes tend to capture the Alabamian imagination, leading to some sinister scamming that preys on the faithful.

But perhaps there is also a disconnect between the state of Alabama and the people when it comes to a lottery.

Throughout the years, there have been several legislative attempts and referendums to get a lottery going in the state. The back-and-forth is confusing to anyone who doesn't follow this particular arcane government news closely.

This is compounded by the fact that the vast majority of surrounding states all have a lottery, and that anyone with an Internet connection is subjected to constant lottery advertisements and national jackpot announcements.

Without extremely clear messaging from the state, it could seem perfectly plausible that there is, in fact, a lottery in or that you can play from Alabama, making it open season for scammers.

Signs of scams

Anyone can be a victim of a lottery scam. Bottom line: if you haven't played a state-sanctioned lottery, you can't win a prize.

If you receive any correspondence saying that you've won a prize for a game you never played, it is a scam.

For example, some victims receive fake checks. They may be told that they need to submit “transfer fees” to claim their prize. Typically, the messages will sound urgent in order to promote panic and hasty reasoning. Don't fall for it.