Which States Have the Biggest Lottery Payouts?

Lottery Payouts by State

If you enter multi-state lotteries like Powerball and Mega Millions, you might not think that where you buy your lottery tickets would make a difference if you win. However, states handle how to distribute the money people pay for lottery tickets differently. Some use a higher percentage of the sales for prize payouts, while others use more money for good causes.

The result is that where you buy your tickets affects the size of the payout you’ll receive if you become a hit a jackpot.

The chart below shows the states with the best lottery payouts by percent.

What Are Lottery Payouts?

The definition of a lottery payout is:

The percentage of ticket sale money that the lottery returns to winners as prizes.

For example, if a lottery sold a million dollars worth of tickets and gave away $500,000 in prizes, the lottery payout would be 50%.

Remember that lotteries are about more than awarding prizes. States use the money that they receive from lottery ticket sales for various purposes including funding educational initiatives and other social causes, paying the overhead costs of running the lottery and paying commissions to locations that sell winning tickets in addition to the prize payouts.

Some states give a larger percentage of the money that they receive from ticket sales back to their winners than others do. Some use more of their lottery income for overhead costs including employee salaries, advertising expenses, and more.

However, overhead alone doesn’t account for the entire difference; states with the biggest overhead costs are not necessarily the states with the lowest payouts. States with lower payouts might pay higher retailer commissions or allocate more funds for social causes.

While these may be worthy causes, those payout variations can make a big difference to winners. So which states offer the biggest payouts?

The United States Census Bureau provides information about how states spend their lottery money. By comparing the ratio of ticket sales to prize payouts, you can compare which states offer the biggest advantage for players.

Which States Have the Biggest Payouts for Winners?

According to census information from 2018, lottery winners in the United States receive an average of 64% of lottery ticket sales as prize payouts.

Five states — Alaska, Alabama, Hawaii, Nevada, and Utah — don’t offer lotteries in their states at all, so we can skip them in this article.

Of the remaining 44 states, 24 offer payouts above the 64% payout average, while 20 states fall below the national average.

The state with the absolute highest lottery payout in 2018 was Idaho, which has an impressive payout: 78.5% of their lottery sales goes toward prizes.

With an annual lottery income of $224,347,000, Idaho doesn’t sell a lot of lottery tickets compared to states like New York or California. However, not many states spend less on overhead than Idaho does, so the lottery winners profit.

After Idaho, eight states give more than 70% of their lottery earnings as prize payouts: North Dakota, Massachusetts, Arkansas, Arizona, South Carolina, Pennsylvania and Maine round out the states with the highest lottery payouts.

Which States Have the Worst Lottery Payouts?

The state that has the lowest lottery payout is West Virginia, which distributes only about 16% of the money it earns back to winners, despite having the fourth-lowest overhead costs of any state.

Two other states — Oregon and South Dakota — also had payouts of less than 30% of their lottery income, while Delaware and Rhode Island are both in the 30% range.

The next six states had payouts between 50% and 60% of their income.

Low Payouts Don’t Indicate a Bad Lottery

So what does this information mean to you? Well, if you are looking solely at the chance of recouping the money you spend on lottery tickets when you win a prize, the states with the highest payouts are obviously the most attractive.

If you live near a state border and want to buy tickets, you can use a chart of payouts to decide which state would be the best for you to buy tickets in.

However, if you're a resident of the state, the chances are high that you will benefit more from the social causes the lottery sales support than you ever will from the tickets you buy. The chances of hitting a jackpot are so slim — and the social causes help everyone in the state.

For example, the state with one of the lowest lottery payouts, South Dakota, offers an annual report showing where their lottery funds go. In 2019, when the census report was released, lottery funds contributed around $123 million to the general fund, which helps finance primary, secondary, and technical schools. A significant amount of the lottery income also went toward highway construction and repair, a Water and Environment Fund, and an Ethanol Fuel Fund.

So even when the payouts are lower, a good percentage of the lottery ticket sales are still being used for the common good.

Listing of the Payout Percentages by State

If you'd like to see where your state falls in terms of lottery payouts, here's the entire list from 2018:

  • Idaho: 78.53%
  • North Dakota:74.95%
  • Massachusetts: 73.72%
  • Arkansas: 72.51%
  • Arizona: 70.82%
  • South Carolina: 70.68%
  • Vermont: 70.34%
  • Pennsylvania: 70.12%
  • Maine: 70.01%
  • Tennessee: 69.59%
  • Florida: 69.38%
  • Minnesota: 69.04%
  • Michigan: 68.96%
  • Texas: 68.90%
  • North Carolina: 67.97%
  • Colorado: 67.77%
  • Georgia: 67.69%
  • Ohio: 67.66%
  • Kentucky: 67.49%
  • Indiana: 67.37%
  • Connecticut: 66.23%
  • Washington: 65.70%
  • Illinois: 65.30%
  • Virginia: 64.78%
  • Median Lottery Payout for the United States: 64.56%
  • California: 64.27%
  • Missouri: 64.26%
  • Wisconsin: 64.03%
  • New Hampshire: 62.62%
  • Kansas: 62.39%
  • New Jersey: 62.33%
  • Iowa: 61.33%
  • Maryland: 61.13%
  • Wyoming: 60.26%
  • Oklahoma: 58.62%
  • Louisiana: 56.88%
  • New York: 56.10%
  • Nebraska: 54.63%
  • New Mexico: 54.57%
  • Montana: 54.55%
  • Delaware: 30.75%
  • Rhode Island: 30.10%
  • Oregon: 21.91%
  • South Dakota: 20.37%
  • West Virginia: 16.97%