In January of this year, someone won a $1.5 billion Mega Millions jackpot. Before that, a Powerball jackpot of $1.56 billion was split three ways.
The lottery is a potential golden ticket to the top in the eyes of many Americans. Despite its incredibly slim odds, consumers are willing to spend a significant amount of money each year in hopes of winning the big prize.
The hope for riches allows the United States to generate a massive amount of revenue for the country.
Using the most recent U.S. Census Bureau data, LendEDU analyzed which states were generating the most revenue from the lottery and calculated which states’ residents spend the most annually.
Furthermore, we tested our own luck by purchasing $1,000 worth of New Jersey Lottery scratch-off tickets to discover the odds of winning.
Americans Spent An Average of $219.54 on the Lottery in 2017
According to LendEDU’s analysis of the most recent data, the average American spent $219.54 on the lottery in 2017. Compared to 2016, this number is down $3.50 but it is up $12.85 from 2015.
How did we calculate this stat?
According to the U.S. Census Bureau, the U.S. generated $71,826,676,000 in lottery revenue in 2017. The Census Bureau also projected the current population to be at 327,167,434. We divided these two numbers to calculate the average American lottery expenditure statistic.
State-by-State Lottery Spending in 2017
Using each state’s respective 2016 lottery revenue and population, we calculated which states’ residents spent the most and least in 2017 on the lottery.
Currently, six states do not offer a lottery: Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah.
Washington D.C. does offer a lottery but does not report any official figures to the U.S. Census Bureau, therefore they have been excluded from this report.
Massachusettsans Spent the Most on the Lottery
Residents of Massachusetts spent by far the most at $737.01, although this is down from the year prior of $762.98.
This equates to nearly 2% of their annual household income.
How did we calculate this stat?
According to U.S. Census Data, the average household income in the state of Massachusetts is $77,385. On average, there are 2.58 people per household. Assuming 2 of those people are 18 and over, the average Massachusetts household spends 1.9% of their annual income solely on lottery tickets.
North Dakotans Spent the Least on the Loterry
North Dakotans, however, spent only $34.68 the lottery in 2017, which is even lower than last year’s $44.90.
State-by-State Lottery Expense Per Capita Year-Over-Year Comparison
State-by-State Lottery Revenue Year-Over-Year Comparison
LendEDU Spent $1,000 for 314 Lottery Tickets. Was it Worth it?
To test our own luck, we went to four local convenience stores and bought $1,000 worth of scratch-off tickets.
In the two previous years this study was done, LendEDU lost a decent chunk of change ($141 for 2018 and $26 for 2017) on the same amount of scratch-off tickets.
We bought the same number of tickets as the previous years (314) and the same amount in each price category of a ticket.
After some extreme scratching, an unbelievable amount of dust, and sheer frustration with the crossword puzzle tickets, the winnings were summed up.
Ticket-by-Ticket Breakdown
Overall Breakdown
Thanks to Nate, scratching his first $30 ticket and winning $2,000, we were instantly in the black. Overall our return on investment (ROI) was 173.80%, which is a pretty fantastic return.
Our most valuable ticket type in terms of ROI was $30, winning $2,150 and achieving an absurd 1,333.33% ROI. Taking the $2,000 out of the picture, then the ticket-type ROI winner would be the $5, winning $175 and a whopping ROI of 6.06%.
This profit makes up for our total previous-two-year loss of $167 and puts us at $1,858 profit for this year, or $1,681 in total — non-withstanding taxes.
Odds of Winning Scratch-off Games
One of the interesting year-over-year trends was the percent wins and total wins per ticket type. Each year our win percentage has slightly gone up, from 21.66% to 22.61% to 22.93% from 2017 to 2019.
Methodology
All lottery data found within the first section of this report was pulled from the U.S. Census Bureau. We used the data from the 2017 Annual Survey of State Government Finance Tables, which was last revised on May 3, 2019. This data was broken down by each states’ government finances in regards to the lottery. This data provided the revenues generated from the lottery in 2017. Due to 2018’s data not be released until 2020, this is the most recent lottery data available. The second data source used was the U.S. Census Bureau’s state population totals and population projections for 2018. Each state’s lottery revenue was divided by the same’s state’s population for 2018 to find the yearly lottery expense per capita.
For the Massachusetts percent of income spent on lottery tickets, we used data solely from the U.S. Census Bureau. For the median household income, we used the data from the Household Income: 2017 report, which was published on September 13, 2018. For the average household size in the United States, we used the Households and Families: 2010 report issued April of 2012.
For LendEDU’s lottery experiment, we went to several convenience stores around Hoboken, New Jersey, and purchased $1,000 worth of scratch-offs. We bought a certain amount per ticket type ($1, $2, $5, $10, $20, $30) so that the total cash value of each ticket type was as similar as possible (ranging from $150 to $180). 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 (ROI) was calculated as (Current Value – Beginning Value) / Beginning Value.
The data gathered within the infographic for how Americans spend more money per year on video games, concerts, and movies combined was gathered from several sources. These sources are reputable and are using officially calculated figures.
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?
Ticket-by-Ticket Breakdown
Overall Breakdown
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!
Methodology
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.
See more of LendEDU’s Research