Lotteries serve as the world’s most-popular form of gambling. They routinely draw tens of millions of gamblers across the globe on a weekly basis.
Most people buy scratch-offs and drawing tickets because they want a chance to win big. However, these same players often don’t realize just how bad their chances are of winning.
Lotteries offer lower return to player (RTP) than any other type of gambling. In some cases, you’ll be facing just 20% RTP. In other words, you’ll win back just $0.20 for every dollar wagered!
I’ll cover more on lotteries and their low payback. I’ll also discuss which lotteries you should choose if you’re going to play anyways.
How Much Do Lotteries Normally Pay Back?
Lottery payout percentages vary wildly from state to state. They also differ quite a bit when going from regular state drawings to multi-state lotteries.
Speaking of the latter, Mega Millions and Powerball are among the worst offenders regarding low RTP. These multi-state lotteries especially feature pitiful payback when their jackpots are first seeded.
Mega Millions seeds its jackpot at a hefty $40 million. With drawings happening twice a week, the top prize grows by a minimum of $5 million when it goes unclaimed.
You only have 1 in 302,575,350 odds of winning the jackpot. Of course, these long odds are expected when the Mega Millions jackpot often reaches nine figures.
What you may not expect, though, is the 20% RTP when the prize is first seeded. Mega Millions RTP only reaches 60% when the jackpot grows to $250.
Powerball isn’t any better in terms of payback. Its top prize begins at $20 million and experiences a minimum rollover of $2 million between drawings.
The Powerball RTP begins at 23% when the prize is seeded. Payback grows to just 55% once the jackpot reaches $250 million.
The good news is that almost every state lottery offers higher payout percentages than Mega Millions and Powerball. But these payback figures also don’t quite equal other forms of gambling, like casino games and bingo.
State lottery RTP ranges from 20% to 80% across America. I’ll get more into which states offer the highest and lowest payback later.
The point, though, is that most state lotteries still don’t contend with the average casino game in terms of the house edge. Even slot machines, which are regarded as one-armed bandits, pay back around 92-93% on average.
Why Are Lotteries So Stingy?
States don’t offer low payout percentages because they’re money grubbers that want to cheat players. Instead, they use revenue to pay lottery commission staff members and cover beneficial programs.
The California Lottery, for example, distributes its money as follows:
- 50% in payouts to players.
- 34% to the California Department of Education (kindergarten to graduate school).
- 16% in administration costs.
Players might only win back half of their wagers. However, most are satisfied with over one-third of ticket sales going to education.
You might still not appreciate the fact that you’re buying into one of the worst gambles known to man. At least your money is going to a good cause, though.
States Vary on How Much They Pay Back to Players
Every state has the same lottery goal: to raise money for important causes. However, each also has the ability to choose which programs the money goes to and how much gets awarded to players.
Most important to your case, lotteries vary on how much they put into prize pools. As much as a 60% gap exists between the highest and lowest lottery payout percentages.
Ultimately, you may only care about chasing big jackpots and helping good causes. But if you care about winning, then you’ll want to pay special attention to the information below.
Which State Lotteries Offer the Highest RTP?
The average state lottery features 64% payback. However, you can do much better than this if you choose the right states.
Idaho is a lottery player’s paradise regarding payout percentages. It delivers over 80% of prize money back to gamblers.
The big catch is that the Gem State doesn’t feature the country’s biggest jackpots. But they do pay the most prize money per dollar wagered.
Massachusetts ranks second among US lotteries with 73.41% RTP. Although noticeably lower than Idaho’s RTP, this payout percentage is quite respectable in the grand scheme of things.
Arkansas (71.87% RTP), Maine (70.57%), and South Carolina (70.40%) round out the top five. You can see a complete list of the 10 highest-paying US lotteries below.
- Idaho: 80.02%
- Massachusetts: 73.41%
- Arkansas: 71.87%
- Maine: 70.57%
- South Carolina: 70.40%
- Missouri: 68.78%
- Vermont: 68.78%
- Arizona: 68.67%
- Indiana: 68.58%
- Minnesota: 68.41%
Which State Lotteries Offer the Lowest RTP?
Some states aren’t very generous with prize money. Fortunately, you know that these funds are going to a good place. On the downside, you won’t win much on average when playing these games.
South Dakota ranks dead last in lottery payback. The Mount Rushmore State only gives players back 20.32% of ticket sales.
Oregon turns up second to last regarding RTP. The Beaver State may offer more RTP than South Dakota at 25.05%, but it still lags well behind the rest of America.
Delaware (27.20% RTP) and Rhode Island (29.81%) are two more states that don’t even eclipse 30% payback.
Here are the bottom 10 states when it comes to lottery RTP:
- New York: 55.48%
- New Mexico: 54.91%
- North Dakota: 54.02%
- Montana: 52.76%
- West Virginia: 51.82%
- Oklahoma: 50.37%
- Rhode Island: 29.81%
- Delaware: 27.20%
- Oregon: 25.05%
- South Dakota: 20.32%
Should You Worry About Lottery RTP?
You likely don’t look at the lottery as an investment. After all, getting $0.65 back on average for every dollar wagered is a terrible investment.
But you may care about your chances of winning some money back. If so, you’ll want to play the highest-paying lotteries in your area.
Ideally, you’ll live near the border of Idaho, Massachusetts, Arkansas, Maine, or any other state in the top 10 RTP list. Assuming you don’t, then you can at least boost your odds by staying away from the bottom 10 states.
Jackpots present another important element. Most gamblers don’t really care about the RTP so long as they get to pursue huge prizes.
The New York Lottery may offer one of the lowest payout percentages at 55.48%. However, it does sell more lottery tickets ($10.3 billion annually) and offer bigger prizes than any other state.
Even if you’re not hung up on jackpots, you might care a great deal about where the money is going. After all, nobody wants to be tricked by a lottery that hoards most of the money for itself.
South Dakota is by far the lowest-paying lottery in the US. However, they do put a large portion of their revenue towards valid causes.
They use ticket sales to fund primary and secondary schools, improve highways, and provide for the Water & Environment Fund and Ethanol Fuel Fund.
The odds of winning the lottery will never be in your favor. Even in the best-case scenario, you can only expect 80% RTP (Idaho).
Most other states pay somewhere between 60% and 70% of ticket sales back. Therefore, you definitely don’t want to buy tickets for the payout percentages alone.
However, you can improve your chances of winning by playing the highest-paying lotteries. Beyond Idaho, Massachusetts (73.41% RTP), Arkansas (71.87%), Maine (70.57%), South Carolina (70.40%), and Missouri (68.78%) offer solid payback.
Of course, you may ultimately decide that either jackpot size or social causes trump payout percentages. But you should still at least try to play better-paying lotteries in your area.