The odds of winning millions in the lottery are extraordinarily low. When the Powerball jackpot reached $587 million in late 2012, a player had a one in 175 million chance of winning the whole thing. Despite the odds, the owners of two tickets took home astronomical sums.
In fact, state governments pay out an enormous amount of money each year. More than $42 billion in prize money was paid out by state lotteries last year alone. Using data provided by the North American Association of State and Provincial Lotteries (NASPL), 24/7 Wall St. identified the 10 states with the highest lottery payouts in 2012.
Not surprisingly, the states with the largest payouts tend to be among the most populous states in the country. The two more populous states, Texas and California, have the fifth and sixth highest payouts, respectively. These states have huge payouts since more people play the lottery — more tickets sold translates to a bigger purse. With the exception of only two states, all those on this list are among the top 10 in both total lottery sales and population.
States have seen profits from lottery increase by a sizable margin in the past several years. In 2012, state lotteries netted $18.7 billion, up from $16.7 billion in 2009. NASPL executive directer David Gale explained that lotteries are earning more because they increased the variety of games they offer, especially in the form of instant win games. There has also, he explained, been an abnormally large number of high jackpots in the Powerball that have spurred interest in the lottery as a whole.
The increase in lottery sales have benefitted many government programs. Most states’ lottery commissions funnel profits to education — particularly K-12. Many states, such as New York and California, direct 100% of the profits to education. There are exceptions to this, however. Some states, such as Rhode Island, place all the money raised by the lotteries in the general fund to be used at the state’s discretion. Proceeds are also used to help support veterans, senior citizens, and conservation programs.
Based on figures provided by NASPL, 24/7 Wall St. identified the 10 states with the largest lottery jackpots. For each state, we looked at sales, payouts and state profit for the state lottery for the past five fiscal years. In addition, we also looked at sales among the variety of games available, such as instant win games, Powerball, Mega Millions and Video Lottery Terminal, or VLT. In the case of two states — Rhode Island and Oregon — the total annual sales figure listed excludes VLT because the state did not report a gross VLT sales figure. However, total payout and profit for all states, including Rhode Island and Oregon, included VLT sales. Finally, we looked at the public projects the profits are appropriated to in each state.