Massachusetts Residents Spend the Most — by Far — on the Lottery, But Rhode Islanders Lose the Most Cash

After a year of high inflation, many Americans may dream more about unlimited wealth. Record-high and near-record-high lottery jackpots occurred this year — a $2.04 billion Powerball jackpot in November and a $1.337 billion Mega Millions jackpot in July.

In light of these life-changing jackpots, LendingTree researchers looked at how much people are spending on lotteries by state — and whether they can afford it. Additionally, we asked nearly 2,000 U.S. consumers about their lottery attitudes and habits. Here’s what we found.

Key findings

• Massachusetts residents spent the most per capita on lottery tickets and scratch-offs. Residents spent $805.30 per capita in 2020 — the latest available data — dwarfing fellow Northeastern states New York ($455.93) and Rhode Island ($429.88). Meanwhile, North Dakota residents spent only $32.24 per capita, below Wyoming ($40.97) and Montana ($58.62).
• There’s a saying that you have to spend money to make money, and Massachusetts residents playing the lottery are doing that. Residents got back 70 cents in lottery prize money for every dollar they spent in 2020 — the second-highest after Missouri (71 cents) and ahead of three states at 69 cents. In South Dakota, payouts were only 19 cents per dollar spent, below West Virginia (22 cents) and Oregon (23 cents).
• Combining these elements to compare sales to payouts, Rhode Island residents lost the most cash on lotteries. Rhode Island residents had the worst deficit — the amount spent per capita minus prize payouts per capita — at $281.63 in 2020, followed by West Virginia ($249.81) and Massachusetts ($244.49). The states that spent the least overall had the smallest deficits: North Dakota ($15.69), Wyoming ($17.31) and Montana ($24.60).
• Spending and losses only tell part of the story, though, even if Massachusetts remained at the top of the list of states where residents spent the biggest share of their personal income on lotteries. Massachusetts residents still dominated — they spent $10.26 for every $1,000 of personal income in the state in 2020 — but Georgia ($8.29) and South Carolina ($8.27) joined the conversation for the first time.
• Knowing where their state lands on spending and payouts could be important to the 60% of Americans who play the lottery. A separate LendingTree survey found that 86% of lottery players buy scratch-offs, while 65% buy tickets. Amid last month’s Powerball craze, more than half of Americans (58%) say they’d prefer a lump-sum payment if they beat the odds and won the lottery.

Massachusetts residents spend the most per capita on the lottery — here are the other states that rank highest

Feeling lucky? Massachusetts residents certainly do. Residents in Massachusetts spent the most per capita on lottery tickets and scratch-offs, spending $805.30 on lottery games in 2020. That’s 77% more than the amount residents spent in New York ($455.93) and 87% more than the amount residents spent in Rhode Island ($429.88).

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance — the latest available — and 2020 population data from the U.S. Bureau of Economic Analysis (BEA). Assumes store commission of 5.5% of ticket sales.

Meanwhile, North Dakota residents spent only $32.24 per capita on the lottery, the lowest of any state. That’s followed by Wyoming ($40.97) and Montana ($58.62).

Of course, residents in these Northeastern states may have the spare cash to play. All three states have median household incomes above the U.S. median, with Massachusetts’ the highest of the group. In 2020, Massachusetts residents had a median household income of $84,385, while residents in New York had a median income of $71,117 and Rhode Island residents had a median income of $70,305. The median income in the U.S. was $64,994.

Compared to the top-ranking states, those at the bottom had less to spend on the lottery. The median household income in North Dakota was $65,315, while households in Wyoming made $65,304 and households in Montana made $56,539.

Full rankings

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance and 2020 population data from the BEA. Assumes store commission of 5.5% of ticket sales.

Residents in Missouri, Massachusetts get the most lottery bang for their buck

The more you play, the more you could win may be true in Massachusetts. Residents won $560.81 per capita from lottery games, meaning they got back 70 cents in lottery prize money for every dollar they spent in 2020 — the second-highest of any state.

Missouri was the highest-ranking state. While per-capita lottery sales in 2020 totaled $244.79, residents won $172.72 in prizes per capita. That means they won back 71 cents per dollar spent. Idaho, Maine and South Carolina tied for third, with residents in these states winning back 69 cents per dollar spent.

Comparatively, South Dakota ranked lowest. On a per-capita basis, residents spent $207.97 on the lottery and won $40.49, putting their payouts at 19 cents per dollar spent. That’s followed by West Virginia (22 cents) and Oregon (23 cents).

Full rankings

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance and 2020 population data from the BEA. Assumes store commission of 5.5% of ticket sales.

Which states have the biggest lottery losers?

Wins are one thing, but how much are residents losing on the lottery? When subtracting payouts per capita from sales per capita, we found that those in states that spent more generally had the biggest deficits. In fact, two of the three states with the largest per-capita lottery losses topped the list for the most lottery sales.

Rhode Island led the way here. In the state, residents lost $281.63 per capita in 2020. That’s followed by West Virginia, with per-capita losses at $249.81. Massachusetts is arguably the luckiest among these states, with residents losing $244.49 per capita — coming in third despite spending the most of any state.

Of course, the less you pay, the less you have to lose. The states that spent the least overall had the smallest deficits, leading with North Dakota. Residents here lost just $15.69, putting them at the bottom again. That’s followed by Wyoming ($17.31) and Montana ($24.60).

Full rankings

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance and 2020 population data from the BEA. Assumes store commission of 5.5% of ticket sales.

Massachusetts residents spend the biggest share of their personal income on the lottery

Spending your spare cash on the lottery is one thing, but residents in some states spend more of what they make on the lottery than others. Once again, residents in Massachusetts spent the most — they spent $10.26 for every $1,000 of personal income earned in the state in 2020.

Following that, residents in Georgia spent $8.29 for every $1,000 made and residents in South Carolina spent $8.27.

Meanwhile, those in North Dakota spent the least of their personal income on the lottery, spending just 52 cents per $1,000 earned. That’s followed by Wyoming, earning 66 cents per $1,000 earned. Montana is the only state of the bottom three that breaks into a dollar, with residents spending $1.10 on the lottery.

Full rankings

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance and 2020 population data and revised 2020 estimates on state personal income from the BEA. Assumes store commission of 5.5% of ticket sales.

2 of the 3 states that spend the most can least afford lottery losses

When LendingTree researchers flipped the topic and compared lottery losses (rather than lottery sales) to personal income, they found West Virginia can least afford their lottery purchases. Residents in this state lost $5.55 for every $1,000 in personal income.

Following West Virginia, many of the states that ranked highest are also among the states that spent the most on the lottery. Rhode Island ranked second here, losing $4.63, while Massachusetts and New York also made appearances in the top five, spending $3.12 and $2.91, respectively, for every $1,000 in personal income.

According to LendingTree chief credit analyst Matt Schulz, that indicates just how tiny your chances of success are when it comes to the lottery.

Full rankings

Source: LendingTree analysis of the U.S. Census Bureau 2020 Annual Survey of State Government Finance and 2020 population data and revised 2020 estimates on state personal income from the BEA. Assumes store commission of 5.5% of ticket sales.

Scratch-offs vs. tickets: What consumers are playing and how they’d handle a jackpot

According to a LendingTree survey of more than 2,000 consumers, 60% of Americans play the lottery. But who, exactly, are these players?

At the generational level, Gen Xers ages 42 to 56 are the most likely to play lotteries, at 66%. That’s followed closely by millennials ages 26 to 41, at 64%. Comparatively, only 55% of Gen Zers ages 18 to 25 play lotteries — and even fewer baby boomers ages 57 to 76 say similarly (51%).

Source: LendingTree survey of 2,033 U.S. consumers, conducted on Oct. 18, 2022.

By income level, lower-income Americans are the least likely to play the lottery, bucking conventional assumptions. Among those earning less than $35,000, 59% play the lottery. Meanwhile, those earning between $75,000 and $99,999 are the most likely to play (64%).

Schulz says it’s understandable that higher-income consumers are more likely to play, as they’re more likely to have financial wiggle room.

What are people playing? Those who play are most likely to buy both scratch-offs and lottery tickets, but scratch-offs are the most popular choice. Here’s a breakdown:

• 86% buy scratch-offs
• 65% buy lottery tickets

While men and women are nearly equally likely to play, men are more likely to aim for the big bucks: Nearly 73% of male lottery players buy tickets, compared with 58% of women.

By generation, just 56% of Gen Z players buy lottery tickets — the least of any age group. Meanwhile, baby boomers are the biggest billionaire-wannabes: 77% of baby boomer players buy lottery tickets, far outranking any other generation. Baby boomers are also the only generation of lottery players that almost equally prefers buying tickets (77%) or scratch-offs (79%)

Although scratch-offs are generally the more popular choice, consumers are pretty likely to play if the rewards outweigh the risk. Specifically, most consumers (41%) say the jackpot would need to be worth at least $100 million before they’d play. If they were to win, 58% of consumers say they’d take the lump-sum option over the annuity (annual) payments option.

Source: LendingTree survey of 2,033 U.S. consumers, conducted on Oct. 18, 2022.

Six-figure earners are the least likely to take the risk unless the prize is in the nine digits, at 53%. They’re also the most likely to take a lump sum if they win (64%). Overall, however, baby boomers are the most likely group to take the lump-sum option, at 73%.

Schulz’s advice? “Take the lump-sum payment,” he says. “Obviously, nothing is guaranteed, but the idea is that if you take the lump-sum payment and invest it wisely, you could potentially end up with more money in the long run than if you took the annuity payments.”

Skip the lotto: 3 expert-approved methods to grow your personal wealth

Your odds of winning something like November’s Powerball jackpot is 1 in 292.2 million — meaning you’ve got better odds of getting struck by lightning twice or becoming an Olympic athlete. Unless you’re unbelievably lucky (if you are, feel free to shoot me an email) and you’re playing the lottery pretty consistently, Schulz says that money may be better used elsewhere.

“If you only play the lottery occasionally and only spend a few dollars a time, no real harm is done,” Schulz says. “However, if you’re consistently playing $10 or $20 or more each week, that adds up over time. You’re dropping more than $1,000 a year on lottery tickets if you play just $20 per week. That’s real money that could be earning interest and growing your wealth or bulking up your emergency fund instead.”

• Consider cutting your lottery spending in half. A little bit can go a long way. If you are one of those spending $10 a week on the lottery, you could save yourself $500 a year.
• Take the amount you no longer spend each week and automatically transfer it into a high-yield savings account. “If you didn’t miss it when you were playing the lottery, you won’t miss it when it is in your savings account and working for you,” Schulz says. “It won’t seem like much at first, but it won’t take long for it to add up to real money in that savings account, especially with the returns available today from various high-yield accounts.”
• If you have your heart set on playing the lottery regularly, carve out a little bit of space for it in your budget. “In doing so, you’re basically treating it as an entertainment expense, like concert tickets or dining out,” Schulz says. “That way, you can track and manage how much you spend and make sure that your lottery playing doesn’t eat into other more important priorities like emergency funds or retirement savings.”

Methodology

LendingTree researchers analyzed lottery data from the U.S. Census Bureau 2020 Annual Survey of State Government Finance — the latest available. Researchers also used the U.S. Bureau of Economic Analysis (BEA) revised 2020 estimates on state personal income.

Analysts estimated the amount spent by residents of each state on lotteries (annual ticket sales excluding commissions, plus an assumed 5.5% in commissions), prize payouts and net losses on a per-capita basis, as well as the amount spent, won and lost on lotteries per $1,000 in statewide personal income. Losses are defined as total estimated sales minus total prize payouts.

Population data for 2020 is from the BEA. The following states don’t have lotteries and were excluded from our analysis: Alabama, Alaska, Hawaii, Nevada and Utah.

Separately, LendingTree commissioned Qualtrics to conduct an online survey of 2,033 U.S. consumers ages 18 to 76 on Oct. 18, 2022. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.

We defined generations as the following ages in 2022:

• Generation Z: 18 to 25
• Millennial: 26 to 41
• Generation X: 42 to 56
• Baby boomer: 57 to 76