How much do Americans spend on lottery tickets?

States are taking in a record amount of revenue from lottery tickets, but sales vary widely from state to state, according to data compiled by Motley Fool Money.

The article used data from sources including the U.S. Census from 2022, which is the most recent lottery-related Census data available. 

Here are some highlights.

A record amount of sales

In 2022, US states raked in $97.8 billion in sales, an all-time record. Sales were relatively similar the year before, but they skyrocketed in 2020 from $80 billion during the pandemic, which marks the biggest increase on record year-over-year.

Roughly $28.3 billion was actually available for state use after prize payouts and administrative costs. About $65.2 billion were paid out in prizes across the country, which is another all-time record.

This means Americans spend $392 every year per capita on tickets - however, this is not spread out evenly. Only 50% of Americans bought at least one ticket at all that year, while the majority of those buyers only played for rare, massive jackpots.

One takeaway is that a small minority of Americans buy the vast majority of lotto tickets annually, and they buy more with each passing year.

Among the 47 states that host lotteries, 2% of all state taxes collected came from lottery. This number has steadily decreased since 2016, when the lottery accounted for 2.5% of state taxes. States spend lottery income on public resources like schools, roads, compulsive gambling initiatives, and more.

Which state spends the most/least?

The data shows fascinating differences from state to state regarding lotto spending habits.

Massachusetts residents far and away outspent other states in 2022 on lottery tickets, coming in at $1,037 per capita. The closest second was Rhode Island, which came in at $627 per capita.

Massachusetts has a rich history of heavily promoting the lottery. Officials have also argued that players come to Massachusetts from other states because of their high prize payouts. In a 2023 interview with Spectrum News 1, Massachusetts Lottery Executive Director Mark William Bracken noted that, in New Hampshire, for example, $10 instant tickets offer prizes of $50,000 and $500,000, while tickets at the same price in Massachusetts offer $4 million prize payouts.

The lowest per capita spend on lottery tickets came out of North Dakota at $47, followed by Wyoming at $57.

Which state has the biggest winners and losers?

Every state took in more money on lottery ticket sales than were paid out through prizes.

Massachusetts residents won $764 in prizes per capita by playing the lottery in 2022, making it the top prize-winning state by far. In second place was Georgia, where players won $427 per capita. These numbers are skewed by big individual winners - they don't necessarily mean that winnings are more common among a wide swathe of people in these states.

Looked at another way, Missouri and Virginia paid out the highest prizes in 2022 per dollar spent per capita, at $0.75.

In terms of lottery losses, Rhode Island has the highest rate per capita at $407, with West Virginia in second place at $389.