At the time of this writing, there has yet to be a winning ticket drawn for the Mega Millions jackpot; the prize is now sitting at $502 million, which is the fourth time the pot has climbed past half a billion dollars.
On Friday, millions of Americans will head to their local convenience store, pick their lucky numbers, and hope that they are the winner of a life-changing sum of money.
The lottery, despite the incredibly slim odds of winning, always makes one winner, or a few, very wealthy.
But, the gambling phenomenon doesn’t just line the pockets of a few fortunate consumers; lotteries produce quite a bit of revenue for the United States.
Using the most recent U.S. Census Bureau data, LendEDU discovered which states were generating the most revenue via lottery games. We also found which states’ residents spend the most per year chasing down the dream of winning the lottery and retiring to a villa in the Italian countryside.
Further, LendEDU conducted a lottery study of our own by purchasing $1,000 worth of scratch-off lottery tickets and discovering what the odds of winning are.
Americans Spend $223.04 Per Year on the Lottery
According to LendEDU’s analysis of the most recent data, the average American spends $223.04 per year on the lottery. Compared to the same study we conducted last year, this number is actually up by $16.35.
How did we calculate this stat? According to the U.S. Census Bureau, the U.S. generated $72,649,684,000 in lottery revenue in 2016. The Census Bureau also projects the current U.S. population to be at 325,719,178. We simply divided these two numbers to come up with an average American lottery expenditure statistic.
The numbers get really interesting when they are evaluated on a state-by-state level.
Massachusettsans Spend the Most on the Lottery, North Dakotans the Least
Using each state’s respective 2016 lottery revenue and population, we were able to find out which states’ residents spend the most and least per year on the lottery.
On the high end of the spectrum, folks from Massachusetts spend the most on the lottery per capita, $762.98. On the other end, North Dakotans spend $44.90 on the lottery, or the lowest average figure.
For reference, last year’s report found that people from Massachusetts spent $734.85 on the lottery, while North Dakotans were spending $34.09 per capita. Year-over-year, both states held their respective bookend positions on the state spectrum.
Further, six states currently do not offer a lottery: Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah.
LendEDU Bought $1,000 Worth of Scratch-Off Lottery Tickets…Did We Win?
Similar to last year, LendEDU went out to our local convenience store and bought $1,000 worth of scratch-off lottery tickets, nearly wiping out the store’s inventory in the process.
We bought the exact same number of tickets as last year (314), and the exact same number of each type of ticket. Scratch-off lottery tickets range from $1 in price to $30, and we made sure that the value of each ticket total was near the same. For example, we purchased 165 $1 tickets for a total value of $165 and five $30 tickets for a total value of $150.
After rigorous scratching, how did we fare?
As the tables found above depict, we ended up losing a bit of money on our $1,000 scratch-off experiment. Overall, our ROI was -14.1 percent; this is not the most welcomed outcome for avid lottery players.
Our most valuable ticket type in terms of ROI was the $30 scratch-off, which won us $230 for a 53.33 percent ROI. Our least valuable ticket was the $10 scratch-off, which won us $60 for a -64.71 percent ROI.
For reference, we fared slightly better last year when our total win amount was $974, and our ROI was -2.60 percent. However, we received a bit of luck when a single ticket returned $500.
One of the most interesting year-over-year trends pertained to the number of wins delivered by each ticket type. Keeping in mind that we bought the exact same amount of each ticket during both experiments, the number of wins for each ticket type was nearly identical!
All lottery data found within the first section of this report was pulled from the U.S. Census Bureau. First, we used the data for the 2016 Annual Survey of State Government Finances, which was released on Feb. 2, 2018. This data was further broken down for government finances for each state’s respective lottery. This data provided the revenue generated from the lottery in 2016. This is the most recent lottery data, as 2017’s data will not be released until 2019. The second data source that was used was the U.S. Census Bureau’s state population totals and population projections for 2017. Each state’s lottery revenue was divided by the same state’s population for 2017 to find the yearly lottery expense per capita.
For LendEDU’s lottery experiment, we went to a few convenience stores around Hoboken, New Jersey and purchased $1,000 worth of scratch-offs. We bought a certain number of $1, $2, $5, $10, $20, and $30 scratch-off tickets so that their values were as equal as possible. Winning percentage was calculated by dividing the number of winning tickets by the total number of tickets. Win value was calculated by adding up the totals from each winning ticket. Return on investment was calculated by dividing purchase value from the win value, and then dividing that number by the purchase value, and then multiplying by 100.