Lotteries are big businesses in most states, and they can provide windfalls for both the winning ticket-holders and state coffers. In the case of lotteries that include multiple states like Mega Millions and Powerball, jackpots have hit records of over $300 million.
The guaranteed winners of lotteries, though, are state treasuries, which can receive several hundred million dollars a year on annual ticket sales of over $1 billion. The costs of operating a lottery are relatively low, the margins are excellent, and in this new era of government austerity, the funds they generate are even more important. Many states rely on lottery revenues to beef up education budgets: In New York, the lottery accounts for 5% of education spending. In others, the money goes into the general fund.
But the numbers that might most interest individuals are their own odds of winning.
The 10 States That Pay Out the Biggest Lottery Jackpots
- States Where It Pays to Play
- 10. Michigan
- 9. New Jersey
- 8. Ohio
- 7. California
- 6. Pennsylvania
- 5. Georgia
- 4. Texas
- 3. Florida
- 2. Massachusetts
- 1. New York
- More Galleries at 24/7 Wall St.
- More Galleries from DailyFinance
Business news website 24/7 Wall St. has compiled a list of the 10 states that pay out the most in lottery winnings. The figures we're using are based on the most recently available full data, which is from 2009. It turns out that the best states in which to buy a ticket don't change much from year to year. And in terms of total prizes paid to all players and the size of the maximum prize, New York holds the crown.
10. Illinois
- Largest Jackpot: $363 million, (two-state lottery win shared with Michigan, 2000)
- Prizes Paid: $1.23 billion
- Ticket Sales: $2.1 billion
- State Profit From Sales: $625 million
- Government Use: K-12 Education, veterans benefits, multiple sclerosis research
The Illinois Lottery has been in operation since 1972, but for the first 13 years, its profits went directly into state's general budget. Since 1985, revenues from the lottery have been earmarked, with $15.48 billion -- the vast majority of the total state profits -- going specifically to K-12 education, although smaller sums have been diverted to other projects over the years. For example, the Illinois Veterans Assistance Fund has received $7.24 million and the "Ticket for the Cure Fund" received $6.8 million.
9. Michigan
- Largest Jackpot: $363 Million, (two-state lottery win shared with Illinois, 2000)
- Prizes Paid: $1.4 billion
- Ticket Sales: $2.38 billion
- State Profit From Sales: $702 million
- Government Use: K-12 education
The Michigan Lottery has been operating since 1972. In that time, it has generated more than $16 billion in revenue for the state's education fund. In 2006, Michigan joined five other states to found a multistate lottery called The Big Game, which would eventually become Mega Millions. Along with Powerball, it produces the largest jackpots in the country. In May 2000, when it was still called The Big Game, one Michigan resident won half of a $363 million jackpot, the third-largest combined jackpot ever won in a lottery in the U.S. The largest single-ticket prize in the state went to a couple in Port Huron, who won $208 Million before taxes.
8. Ohio
- Largest Single Jackpot: $270 million (2006)
- Prizes Paid: $1.5 billion
- Ticket Sales: $2.41 billion
- State Profit From Sales: $702 million
- Government Use: Education
The Ohio Lotto's motto is "Take a chance on education. Odds are, you'll have fun!" Since it began in 1974, more than $17 billion in lottery profits have gone to a state education fund. Since 1989, the state lottery association has hosted a game show called Cash Explosion Double Play which runs on Ohio TV. The largest jackpot in the state's history went to an individual in the town of Lyons for $270 million.
7. California
- Largest Single Jackpot: $315 million (2005)
- Prizes Paid: $1.6 billion
- Ticket Sales: $2.97 billion
- State Profit From Sales: $1.04 billion
- Government Use: Education
California instituted its lottery in 1984, when it was looking a method for increasing spending on education without raising taxes. The largest jackpot which included a California resident was a $336 million prize shared with a ticket holder in New York in May 2000. The largest single-ticket win for a California resident was a $315 million Mega Millions jackpot awarded in November 2005. That remains the third-largest single-ticket prize in history: An Oregon resident won $340 million in 2005 and a Nebraska resident won $365 million in 2006. In 2010, as one of his last acts in office, then-Gov. Arnold Schwarzenegger proposed a bill which would increase the efficiency of the California Lottery while increasing the percentage of ticket sales that go to state profits. Payout for ticket holders remained at 50%.
6. Pennsylvania
- Largest Single Jackpot: $213 million (2004)
- Prizes Paid: $1.9 billion
- Ticket Sales: $3.09 billion
- State Profit From Sales: $910 million
- Government Use: Services for the elderly
Since the Pennsylvania State Lottery began, it has steered $20.6 billion to a variety of causes, but its profits have primarily been funneled into an elderly benefits fund. This fund includes subsidies for transportation, tax rebates and Medicare. Currently, about 61% of the roughly $3 billion in annual ticket sales go to prizes, while 30% goes to the state, and the rest covers expenses. That's a higher percentage of prize return than most other states.
5. Georgia
- Largest Single Jackpot: $390 million (two-state lottery win shared with New Jersey, 2007)
- Prizes Paid: $2.2 billion
- Ticket Sales: $3.66 billion
- State Profit From Sales: $872 million
- Government Use: Education
One Georgia resident was part of the largest jackpot in the history of the American lottery, winning half of $390 million on February 18, 2006. The other half went to a ticket holder in New Jersey. The state has one of the least efficient lottery systems in the country, with 17% of sales going to pay for the cost of operations. The Georgia lottery also only returns a third of total sales to the public fund, where the money goes to support education. The state didn't begin selling lottery tickets until 1993, making it one of the newest systems in the country. In its first year in operation, the Georgia lottery system sold roughly $1.1 billion in tickets, the most successful entry year on record. Georgia joined the Multi-State Lottery Association (MUSL) in 2010.
4. Texas
- Largest Single Jackpot: $330 Million, (four-state shared lottery win, 2007)
- Prizes Paid: $2.3 billion
- Ticket Sales: $3.72 billion
- State Profit From Sales: $1.04 billion
- Government Use: Education, state general fund
The Texas Lottery began operating in 1992, just a year before Georgia. Since then, the program has raised $17 billion for the state, with $5.1 billion of that going to the state's general fund, $180 million going to health care programs, and the lion's share -- $11.6 billion -- going to education. In its relatively short history in the MUSL, Texas hasn't had an truly big winners. In August 2007, one resident won part of a $330 million jackpot, but the winnings were split between holders in three other states.
3. Florida
- Largest Single Jackpot: $189 million (2009)
- Prizes Paid: $2.4 billion
- Ticket Sales: $3.93 billion
- State Profit From Sales: $1.28 billion
- Government Use: Education trust fund
Florida's lottery benefits the state education trust fund, to which $20 billion has gone since system began operating in 1987. At the moment, lottery income represents about 5% of the state education budget. Florida joined the Multi-State Lottery Association in 2009. Because of its late entry into the MUSL, Florida hasn't had a winner whose jackpot was on the scale of some of the others. However, in October, just nine months after joining MUSL, a Florida resident hit the Powerball jackpot and won $189 million. The MUSL now has 33 members (including Washington, D.C., and the Virgin Islands).
2. Massachusetts
- Largest Single Jackpot: $294 million (2004)
- Prizes Paid: $3.2 billion
- Ticket Sales: $4.44 billion
- State Profit From Sales: $859 million
- Government Use: City and town funds, compulsive gambling, the arts
In 2009, the Massachusetts lottery paid out roughly $3.2 billion in prizes to lottery winners, making it the second highest paying state in the country. The extent to which the state profits, however, is low compared to other states. In 2009, the state beneficiaries, which include city and town governments, a state arts fund, and a compulsive gambling support group, received only $859 million. Florida's respective payouts were less, $2.4 billion, but the state still earned $1.28 billion.
1. New York
- Largest Single Jackpot: $336 million (two-state lottery win shared with California, 2009)
- Prizes Paid: $4 billion
- Ticket Sales: $7.66 billion
- State Profit From Sales: $2.7 billion
- Government Use: Education
Besides having the largest lottery system in dollar terms in the country, New York has one of the richest histories of government-run gambling. Since the late 1880's, lotteries and raffles have been used to raise funds for regional public works projects. New York was one of the first states to begin a state-wide system as well, voting in the program in 1966. Since the lottery began in official capacity the following year, more than $36 billion has been raised to fund education. This sum accounts for approximately 13% of all the money that has been raised in the history of U.S. state-run gaming.
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