May 27, 2011

Lottery Payouts, Adiminstration and Proceeds by State

Most states have some form of lottery.   I occasionally enjoy playing the lottery as a form of entertainment.   $1 is not a large price to pay for a little day dreaming about what I would do with my giant jackpot which I fully realize I have virtually no realistic chance of winning.   Lotteries are often criticized as being a rip off for the player.

I got data on the lottery payouts and state revenue for 2006 from the National Conference of State Legislature website.  Its a few years old but I doubt the numbers have changed radically.

Nationally the average payout in prizes is 64.5% of the bets made.   That means for every $1 spent on lottery games the players get back 64.5¢.     Administration costs about 4¢ of every dollar.    These are the costs spent to advertise the programs, make and sell tickets and pay lottery staff employees, etc.    The remaining money left over after the prizes and administration is paid comes out to 31.5¢ of every dollar gambled.   This money is kept by the state to use for roads and schools and such.

Here is a table with the % of funds that are paid out in prizes, used for administration and retained in profits by the state.


Prizes  Admin Proceed
United States 64.5% 4.0% 31.5%
Arizona 59.2% 8.6% 32.1%
California 58.0% 4.6% 37.5%
Colorado 64.6% 7.0% 28.4%
Connecticut 64.1% 4.2% 31.7%
Delaware 55.1% 1.1% 43.8%
Florida 63.1% 3.9% 33.0%
Georgia 66.0% 4.4% 29.7%
Idaho 63.1% 8.5% 28.3%
Illinois 63.7% 3.0% 33.3%
Indiana 64.9% 6.3% 28.8%
Iowa 52.8% 12.6% 34.6%
Kansas 61.7% 10.8% 27.5%
Kentucky 64.0% 6.3% 29.8%
Louisiana 53.6% 8.8% 37.6%
Maine 67.6% 7.5% 24.9%
Maryland 62.0% 3.7% 34.3%
Massachusetts 77.0% 2.0% 21.0%
Michigan 64.1% 3.2% 32.7%
Minnesota 70.4% 5.6% 24.0%
Missouri 66.8% 4.0% 29.2%
Montana 55.1% 19.1% 25.8%
Nebraska 60.1% 11.9% 28.0%
New Hampshire 61.3% 6.7% 32.0%
New Jersey 59.2% 3.9% 36.9%
New Mexico 61.7% 13.0% 25.3%
New York 61.2% 4.2% 34.6%
North Carolina 62.3% 7.5% 30.1%
North Dakota 52.0% 16.1% 31.9%
Ohio 63.0% 4.6% 32.4%
Oklahoma 57.2% 6.9% 36.0%
Oregon 71.0% 2.9% 26.0%
Pennsylvania 64.2% 2.3% 33.6%
Rhode Island 78.5% 0.5% 21.0%
South Carolina 66.0% 4.0% 29.9%
South Dakota 78.1% 1.3% 20.6%
Tennessee 66.7% 5.6% 27.8%
Texas 64.5% 5.2% 30.4%
Vermont 67.3% 9.8% 22.9%
Virginia 60.0% 5.0% 35.0%
Washington 65.2% 7.5% 27.3%
West Virginia 56.4% 1.5% 42.1%
Wisconsin 62.0% 6.1% 31.8%

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