Which States Have the Biggest Lottery Payouts?
Lottery Payouts by State
Lottery tickets are sold in 44 of the 50 United States. Many of these are multi-state lotteries like Powerball and Mega Millions, so you might not think that where you buy your lottery tickets would make a difference if you win.
However, not all states divvy up the money they bring in from lottery ticket sales the same way. This has the result that where you buy your tickets can affect how much you’ll receive if you become a lucky winner. Find out which states have the best and worst lottery payouts.
The chart below shows the states with the best lottery payouts by percent.
What Are Lottery Payouts?
When we talk about lottery payouts, we mean the percentage of the money paid by people for tickets that get returned to the winners as prizes.
The states use the money that they receive for lottery tickets for various purposes including funding educational initiatives and other social causes, paying overhead costs, and distributing prize payouts.
Some states give a larger percentage of the money that they receive from ticket sales back to their winners than others do. Part of the reason for that is that some use more of their lottery income for overhead costs including employee salaries, advertising expenses, and more.
However, overhead alone doesn’t count for all of the difference; the states with the biggest overhead costs are not necessarily the states with the lowest payouts. The rest of the difference probably goes toward expenses like retailer commissions and social causes like education.
Those payout variations can make a big difference to winners. So which states offer the biggest payouts?
The United States Census Bureau provides information about how states spend their lottery money which can answer that question. Here, we’ll compare the percentage of the lottery income to the prize payouts and compare which states are the most advantageous for players.
Which States Have the Biggest Payouts for Winners?
According to the most recent census information from 2016, lottery winners in the United States receive an average of 64% of lottery ticket sales as prize payouts.
Six states -- Alaska, Alabama, Hawaii, Mississippi, Nevada, and Utah -- don’t offer lotteries in their states at all, so we can skip them in this article.
Of the remaining 44 states, 26 offer payouts above that average, while 18 states fall below the national average.
The state with the absolute highest lottery payout in 2016 was Idaho, who has an impressive payout of 80% of ticket money going toward prizes.
With an annual lottery income of $192,018,000, Idaho doesn’t sell a lot of lottery tickets compared to states like New York or California. However, only six states spend less on overhead than Idaho does, so the lottery winners profit.
After Idaho, four states give more than 70% of their lottery earnings as prize payouts: Massachusetts, Arkansas, Maine, and South Carolina round out the top five states with the highest lottery payouts.
Which States Have the Worst Lottery Payouts?
The state which gives the lowest percentage of lottery payouts is South Dakota, which distributes only about 20% of the money it earns back to winners, despite having the fourth-lowest overhead costs of any state
Three other states -- Oregon, Rhode Island, and Delaware -- also had payouts of less than 30% of their lottery income. The fifth lowest state for payouts is Oklahoma, which comes in at just over 50%.
The next eight states had payouts under 60% of their income, while five more were close to the national average, paying out between 60 and 63% of their lottery ticket sales.
Low Payouts Don’t Indicate a Bad Lottery
So what does this information mean to you? Well, if you are looking solely at the chance of recouping the money you spend on lottery tickets when you win a prize, obviously the states with the highest payouts are the most attractive.
If you live near a state border and want to buy tickets, you can use a chart of payouts to decide which state is most advantageous to you.
However, if you are a resident of the state, the chances are high that you will benefit more from the lottery’s social causes than you ever will from the tickets you buy, since the chances of hitting a jackpot are so slim and the social causes help everyone.
For example, the state with the lowest lottery payout, South Dakota, offers a breakdown of where their lottery funds go. In 2016 when the census report was released, lottery funds contributed around $50 million to primary and secondary schools and technical schools. A significant amount of the lottery income also went toward highway construction and repair, a Water and Environment Fund, and an Ethanol Fuel Fund.
So even when the payouts are lower, a good percentage of the lottery ticket sales are still being used for the common good.
Listing of the Payout Percentages by State
If you'd like to see where your state falls in terms of lottery payouts, here is the entire list:
- Idaho: 80.02%
- Massachusetts: 73.41%
- Arkansas: 71.87%
- Maine: 70.57%
- South Carolina: 70.40%
- Missouri: 68.78%
- Vermont: 68.78%
- Arizona: 68.67%
- Indiana: 68.58%
- Minnesota: 68.41%
- Pennsylvania: 68.29%
- Georgia: 68.16%
- Wyoming: 67.84%
- Florida: 67.50%
- Kentucky: 67.36%
- Ohio: 67.31%
- Colorado: 67.31%
- North Carolina: 67.25%
- Maryland: 67.09%
- Michigan: 66.87%
- Texas: 66.46%
- New Hampshire: 66.43%
- Washington: 65.71%
- New Jersey: 65.58%
- Connecticut: 65.42%
- Illinois: 64.35%
- Median Payout for the United States: 64.02%
- Virginia: 63.79%
- California: 63.03%
- Nebraska: 62.26%
- Kansas: 61.45%
- Iowa: 60.44%
- Wisconsin: 59.40%
- Louisiana: 57.00%
- Tennessee: 55.96%
- New York: 55.48%
- New Mexico: 54.91%
- North Dakota: 54.02%
- Montana: 52.76%
- West Virginia: 51.82%
- Oklahoma: 50.37%
- Rhode Island: 29.81%
- Delaware: 27.20%
- Oregon: 25.05%
- South Dakota: 20.32%