Will the U.S. government shutdown deal a bad hand to lottery players?

When the clock struck midnight and the federal government officially shut down, plenty of people started worrying about paychecks, parks, and politics. But for some, a more unusual question popped up: what about the lottery? Could Powerball, Mega Millions, or your favorite scratch-off be caught in the political crossfire, or will the games go on?

Are state lotteries affected?

With the federal government shutting down at 12:01 a.m. ET on Wednesday, October 1, 2025, because no budget deal was reached, some lottery players are wondering if that will have any effect on the tickets they purchased for upcoming games.

In short, no, this federal government shutdown will have no direct impact on your Powerball, Mega Millions, or Lotto 47 tickets. Lotteries are operated and regulated by individual states, not the federal government.

There is no direct impact, and lottery operations continue normally unless a state-level shutdown occurs.

Direct operations and funding

While federal government agencies and funding are being cut off during the shutdown, every lottery in this country is a state-level entity. They each have their own budget and operations.

These state lotteries do not receive any federal funding, and they don't rely on any federal government employees to run the day-to-day business.

That means it's business as usual for your favorite lottery games or scratch-off tickets. The Multi-State Lottery Association, which runs Powerball, is an organization of state lotteries, not a federal agency.

Indirect effect on state lotteries

While the federal government shutdown will have no direct impact on state lotteries, there could be a ripple effect on state revenue if there is a prolonged federal shutdown.

This could negatively impact the national economy, which may then affect a state's overall tax revenue. This could impact the state programs that lottery profits are used to fund, like education, infrastructure, senior citizen programs, and other public services.

The federal government shutdown could lead to a weaker economy and a national economic downturn. This could, theoretically, impact how much people are spending on lottery tickets. While lotteries have typically been recession-proof, it still could lead to lower ticket sales. However, we did see a growth in lottery sales during the beginning phases of the COVID-19 pandemic.

Will you still be taxed on your winnings?

If you happen to win big during the federal government shutdown, you might be wondering if federal taxes would still be withheld during this time. The answer: yes.

The federal government may be shut down, but it will still collect its portion of taxes on bigger lottery winnings. If you happen to win a big lottery jackpot, when you go to claim your prize, a 24% federal tax withholding is automatically applied. Some winners may need to pay more depending on their tax bracket.

Michigan may have its own state government shutdown

While the federal government shut down on October 1, the Michigan state government almost had the same fate. However, they were able to sign a continuation budget, which kept the state government from having to shut down. This stopgap measure is good until October 8, 2025, so if no final budget is passed by then, a Michigan government shutdown could happen.

So, if the Michigan government were to shut down next week, what would that mean for the Michigan Lottery? It would have a major effect, unlike how it does for the federal government shutdown we are experiencing.

Lottery sales in Michigan would likely come to a halt. Lottery retailers would not be able to sell any lottery games or activate any new scratch-off tickets. Their lottery terminals would probably be shut off.

For anyone wanting to claim a big lottery win during a Michigan government shutdown, that likely couldn't happen. The claims process would stop for prizes that need to be processed at a lottery office.

In addition, the additional revenue for the schools that the state lottery provides would also come to a halt. The state lottery's contribution to the School Aid Fund would cease until sales are resumed. This would impact funding for public education, as the lottery contributed $1.2 billion to schools in 2024.

This could also affect online operations for the Michigan Lottery. It's not clear what would happen to online purchases or prize cashing using the state lottery app or website. However, shutdowns in other states have shown that online sales can also be impacted or suspended.

Enjoy playing the Michigan Lottery, and please remember to play responsibly.