The Mega Millions jackpot has hit “uncharted territory” with a grand prize of $1.6 billion up for grabs at Tuesday’s drawing.
There’s a simple explanation for this: In recent years, lottery administrators have tweaked the odds of big name drawings like Power Ball and Mega Millions, making them more difficult to win. That all but guarantees bigger, headline-grabbing jackpots, hence the huge ticket sales.
At the end of the day, however, every lottery is essentially a tax, albeit a completely voluntary one that many taxpayers avoid by simply not playing. The Census Bureau has been tracking lottery expenditures, payouts and contributions to general funds since the mid 1990s as part of its annual Survey of State Government Finances. We’ve compiled those figures into a handful of charts, below, that show how lottery spending has changed over time, and where it remains big.
1. Total lottery spending has more than doubled since 1995
In nominal terms, total spending on state level lotteries increased from $29.8 billion in 1995 to $72.7 billion in 2016, the latest year for which the Census has data. Part of that increase is because of the simple fact that more states offer lotteries. In 1995, only 36 states had a lottery. Today, 44 do. The latest state to add a lottery was Wyoming, in 2013.
2. Per capita lotto spending has doubled
The $29.8 billion Americans spent on the lottery in 1995 worked out to about $112 per capita. Today, per capita spending is up to $225 dollars a year. Again, part of that is the result of more states jumping on the lotto bandwagon.
These are per capita figures, accounting for every man, woman and child in the country. The average lottery player spends quite a bit more than that: If we subtract the 73 million people under age 18, and divide the remaining 250 million in half (since only 49 percent buy a lotto ticket in a given year), it works out to $600 a year in expenses for the average lotto player. Some survey data show that a disproportionate share of regular lottery players fall into low-income brackets.
3. Where do people spend the most money on the lottery?
That $225 figure also masks a lot of regional variation. In some states per capita lotto spending is much lower, in the neighborhood of $90 or less. But in others it’s quite high: Massachusetts leads the nation with an astonishing $767 in annual per capita lotto spending. It’s followed by West Virginia ($594), Rhode Island ($513), Delaware ($421) and New York ($421).
4. Where does lottery money go?
In 2016, just under a third of the typical state’s lottery haul went into the state’s general fund to pay for government programs. That share is down a little bit since the late 1990s, when about 37 percent of lottery revenue flowed directly back to the states.
Conversely the share going toward prize payouts has increased: 64 percent of lottery revenue went to prize purses in 2016, up from 58 percent in 1995. The share of income paying to administer lotteries has hovered in the mid-single digits for the duration.
5. How dependent are states on lottery money?
In some states, lottery proceeds contribute to a significant amount of total state revenue. In Rhode Island, for instance, it’s 4.5 percent, the highest in the nation. In West Virginia it’s 3.6 percent, and Delaware’s lotto provides 3 percent of the state’s revenue.
The geographic pattern is similar to the pattern in per capita spending: States where people tend to spend a lot on the lottery tend to be the most reliant on lottery funds.