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A Guide to Lotteries in the United States
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Lotteries are a big deal in the United States. Chances are you’ve heard of at least one of them.
There are TV commercials. Billboards and magazine ads. Grocery store advertisements. And you can see and buy lottery, scratch and keno tickets at gas stations and convenience stores.
It’s hard to miss them. Especially in recent months.
In early 2016 we saw the biggest lottery ever. The jackpot reached $1.586 billion. It’s the only jackpot to ever reach the billion-dollar mark. 3 people won the prize on January 13th, 2016.
To put that prize into perspective, the state lotteries generated more than $17.6 billion in profits for their budgets in the 2009 fiscal year. And more than 10 of them collected more revenue with lotteries than they earned from their corporate income tax the same year.
The point? It was a darn big jackpot.
And it got a lot of attention. Everyone went out to buy a ticket …or three. But in normal circumstances, the state lotteries usually take a backseat to other more popular gambling games. Especially online.
Which we find crazy because the lottery is legal and you can play it online. It’s odd we don’t see more people talking about it.
In any case, if you’re interested in learning more about the lottery, how it works, and how you can get started, this is one page you’ll want to read from start to finish.
What is a Lottery?
A lottery’s a game of chance. You pick a number, symbol or outcome, and you win a prize if it’s chosen. That’s the general idea anyway. But it depends on the specific game you play. More on that in a minute.
The lottery’s been around for a long time. Centuries. In fact, general forms of gambling date back as far as the times of English colonies. During the 1600s.
The attitude back then was similar to how it is now. Not everyone was on board with it. Many saw gambling as a vice or a form of laziness. Many believed it was why some colonies were unable to support themselves.
Of course, not everyone saw it that way.
The financiers of Jamestown, Virginia used lotteries to support their colony. Their lotteries were sophisticated for that time. They even had instant winners.
It wasn’t long after that each of the original 13 colonies established a lottery to raise their revenue. Which they used for what states (claim!) to use it for today – schools, roads, bridges, and other public necessities.
Things were uneventful for the next couple hundred years.
Then, during the mid-late 1800s, the lottery faced extinction. It was banned in every state but Delaware and Louisiana for moral and religious reasons. And like prohibition, the ban resulted in a rise of underground lotto games, scams and operations.
This continued until the early 1930s. A lottery – similar to the systems we see today – was established in Puerto Rico. Then New Hampshire a couple of decades later, in 1964.
Then in the 1970s “instant lottery tickets” – known today as scratch cards – were introduced. And they became a major source of revenue.
By the 1980s multiple states were (back) on board. And it was during this time we saw the first joint-state lottery. The biggest of which was the Powerball and Mega Millions.
Now we fast-forward to today. Now there are 44 states who offer Mega Millions and Powerball games. And even more states offer various lottery games.
Which States Offer a Lottery?
Lotteries – or similar games and options – are established in 44 states. The most recent to legalize the lottery is Wyoming. They began operation on July 1st, 2013, and started selling tickets about a year later. Here’s a list of all the major US states or territories, whether they offer a lottery or not, and a link to their state lottery website if they do.
Joint-State Lottery GamesMany states offer a joint lottery. These are games you can buy and play from within more than one state. The benefit to these is the jackpots – the more states (and players) involved, the larger the jackpots get.
A good example of joint-state lottery games is Mega Millions and Powerball. Every state participates in both these games except for the states who don’t offer any lottery games.
There are smaller joint lottery games, too. Here are some examples of games and the states who participate.
- 2by2 (3 lotteries) – Kansas, Nebraska, North Dakota
- All or Nothing – Iowa and Minnesota (several other draw games with this name and format are one-state games)
- Cash4Life (6) – Maryland, New Jersey, New York, Pennsylvania, Tennessee, Virginia
- Hot Lotto° (15) – Delaware, District of Columbia, Idaho, Iowa, Kansas, Maine, Minnesota, Montana, New Hampshire, New Mexico, North Dakota, South Dakota, Tennessee, Vermont, West Virginia
- Lucky for Life (20) – Arkansas, Connecticut, Delaware, District of Columbia, Idaho, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, North Carolina, North Dakota, Ohio, Rhode Island, South Carolina, Vermont; adding Colorado, West Virginia, and Wyoming in 2016
- MegaHits° (video slots; 5) – Delaware, Maryland, Ohio, Rhode Island, West Virginia
- Tri-State Lottery (Megabucks Plus°, Pick 3 (Day & Night), Pick 4 (Day & Night), Fast Play°) – Maine, New Hampshire, Vermont
How Does the Lottery Work?
This depends on the game. Most “lotteries” revolve around choosing a set of numbers. Then numbers are drawn. If your numbers match the drawn numbers, you win.
But that’s the simple version. More specifically, you can win by:
- Matching some or all of the numbers drawn.
- Matching a specific combination of numbers – like any 3-digit number with 2 digits of the same. Or any 4-digit number with 3 digits of the same.
- Matching numbers located in specific areas or positions, similar to bingo. For example, you can win with straights, corners, diagonals, etc.
It just depends on what you play.
Take the Mega Millions, for example. Five numbers are drawn from a group of 75. And then 1 number is drawn from a group of 15. You must match all 6 balls (numbers) to win the jackpot.
The odds of doing this? 1 in 258,890,850.
Lotto tickets cost $0.50, $1, $2, etc. But, again, it depends on the game. For example, the Mega Million costs $1 with an additional $1 for the Megaplier option.
And that’s just the lottery. There are many other state “lottery” games you can play where you buy tickets and the goal is to win cash prizes or jackpots. For example, you can play:
- Keno: Pick up to 15 numbers. The more numbers you choose, the more numbers you need to match to win anything. But the more numbers you choose, the larger the prize you can win.
- Scratch Tickets: These are small cards (offline) often based on a theme like Christmas, sports teams or games like bingo or tic tac toe. Each one has a specific outcome or objective. The odds of winning are as low as a winner every 1-3 tickets. The easier the win, the lower the payout, and vice versa. The same goes for ticket prices. The less you pay, the smaller the largest jackpot, and vice versa.
- Sweepstakes: These used to be a form of lottery. But then because of how they work, the United States changed the laws to make these games ‘no purchase necessary to win’ so that companies or states couldn’t get around anti-gambling laws.
You don’t see these from states much anymore, if at all. Sweeps are most often offered by companies who want to draw attention to themselves or a specific product. Popular sweepstake offers include the McDonald’s Monopoly game, Publisher’s Clearing House and the Reader’s Digest Sweepstakes.
Those are the most common games. However, within each of these categories are tons of themes or variations. They vary from state to state and casino to casino.
How are Winners Paid?
This, too, depends on the game you play and how much you win.
Smaller wins are paid by whomever you bought the ticket from. For example, if you bought your scratch ticket from a convenience store, you can go back there (or to any convenience store) to turn it in. You can receive up to $600.
For larger wins, you’ll need to contact your state’s lottery office. Keep in mind that you may need to split your winnings with other winners. This is especially true for joint-state lotteries like Mega Millions or Powerball. For example, if 5 people win, then the winnings are split amongst the 5 people.
Larger sums usually aren’t paid out in full, either. Winners are given two options – an annual annuity or a lump sum. With the annuity, you’re paid the total prize over 20-40 years. But with the lump sum, you only receive 60-70% of the total jackpot, but you get it all at once.
Whichever option you go with, the US government will withhold 25% upfront for taxes. You’ll owe the difference (up to almost 40% total) the following tax season.
Checking for Winners + Time Constraints
Not sure if you have a winner?
You can take your ticket to any place that sells lottery and scratch tickets and they should be able to check your ticket for you. There are also phone numbers you can call. And sheets listing the results from the last few drawing.
You’ll want to keep in mind there are usually time constraints on how long you can take to claim your winnings. 30-360 days is normal. You’ll want to pay attention to that, and any other rules there may be for the game(s) you’re playing. You can usually find them on the game itself, wherever you bought it, or online at your state’s lottery website.
Experts recommend photocopying your (winning) ticket, especially in case you have to mail it. And you might want to send it by registered mail so you have a return receipt.
They also recommend hanging on to your losing tickets. You can use these to verify your gambling losses at the end of each year. The other reason is that some states or games do a ‘last chance’ drawing for people holding onto losing tickets. These don’t run often but are free money when they do.
Where Do State Lottery Profits Go?
This depends. Each state does things differently.
States claim funds go to state-run programs. For example, education, parks, emergency responders, veterans’ health and so on.
But people aren’t so sure states actually do what they say they do.
According to a report from CNN, the money states earn tends to replace money that would go to these programs anyway. They don’t supplement them. They don’t get more. They get the same amount.
An example they gave is North Carolina. They started their lottery in 2005. They were supposed to send 100% of their profits to the public education budget.
But in 2009 they cut their education funding by 12%. Now they allocate a smaller amount of money than they did when the lottery started.
Many states have taken a similar pathOnly 15 states use all or substantially all of the lottery proceeds for education, according to the latest statistics gathered by the North American Association of State and Provincial Lotteries.
What’s sort of unnerving is that in 2013, the states sold more than $60 billion in lottery tickets. However, $20 billion – one-third of their revenue – was returned back to the states’ budgets. Most states do this for undeclared purposes.
Now, some states do send the money where they tell you. But often times it’s not clear where your money goes – at least according to CNN.com.
In another story, a guy by the name of Ed was interviewed while he bought a lottery ticket. He expressed optimism over where his money was going – it was a good cause either way. He would either win money, or at the very least the revenue earned would go to a good cause, such as the public school system.
However, NBC News did the math and roughly only $0.11 of every $1.00 will go to its intended purposes. The rest goes to the winner, the lottery and the company who runs the lottery.
This varies from state to state, though. Another report suggests that some states, like Rhode Island, only collect about $0.11 of every $1 in profit. And that’s before it’s divvied up and distributed to other state-run programs.
Don’t Forget: The US Government Wants Their ShareIt’s not entirely the state’s fault. The US Government wants their share of the prize money, too. And they get a TON of it.
Lottery taxes are taxed the same as income. That means winners of 6+ figure jackpots are paying the highest federal tax rates – as much as 39.6 percent.
Let’s put that into perspective. Let’s look at the $1.5 billion Powerball three people won in January 2016.
If someone took the lump sum option, the amount would come out to $930 million. By the time you paid your taxes, you’d be left with $561.7 million.
Where does the near-$400 million go?
To the US government. And that doesn’t include the state and local income taxes some winners may have to pay, either.
Now, we’re not trying to bash state lotteries. But many people buy lottery tickets in part to help good causes. They deserve to know where their money’s going.
Though you might not get the full picture, many of the state lottery websites tell you where their lottery proceeds go. You can see some examples here:
- New Hampshire – They say 26% goes to New Hampshire schools. They also have reports of their yearly revenue and annual reports for you to look at.
- Idaho – They also have annual reports you can look at.
- Oregon – They say 57% is allocated to public education (and has been for 2013-2015). Some also goes to problem gambling treatment, state parks and job creation.
Playing the Lotto Online
So far all we’ve talked about is playing the lotto offline. But it’s possible to play all these games – the lotto, keno and scratch tickets – online.
It depends on what you want to play, but a good place to start is your state lottery. You’ll find links to each state’s lottery in the previous section. There you can participate in the larger joint-lottery games (Powerball and Mega Millions), as well as play the state’s own lottery and scratch ticket games.
There are apps you can use too, such as Jackpocket. These apps help you purchase tickets online using your smartphone or tablet.
Many state lotteries have their own apps, too. For example, the Washington State Lottery website lets you know you can get their apps from both the Apple and Google play app store.
But another option we haven’t talked about yet is playing the lottery at online casinos and sportsbooks. For example, Bovada, Ignition Casino, 5Dimes, 888 and Bet365.
All these casinos and sportsbooks offer both real money and fake money lottery.
Let’s take 5Dimes, for example. Here are the options you can play there:
- Pick 3 Lottery
- Pick 4 Lottery
You can play any state’s lottery and 5Dimes guarantees 80% higher payouts. That alone is probably the best reason to play there over your state lottery’s website.
5Dimes also has a game called the Lotto900. This pays on any 4-digit number from 0000 to 9999 that comes up in the exact order you select. Several other variations like this pay too. Payouts overall range from 300 to 1 to 9,000 to 1.
5Dimes accepts Americans, as does Bovada and Ignition. But that’s not to say they’re above board.
While it may not be “illegal” for you to play at any one of these casinos, any poker room, casino or sportsbook outside of the legal states (Nevada, Delaware and New Jersey) do not have a license (aka permission) to offer their services in America.
That’s not to say they’re not safe or legit. Just that there are additional risks. For that reason, it may make more sense to play on your state lottery’s website. If anything it may make you feel better.
But if you’re willing to take the additional risk, you’ll have far more gambling options at one of these casinos. You’ll also be able to play casino games, bet on sports and play online poker. It all depends on which one you join.
Another difference is that these casinos offer deposit bonuses. Most are match bonuses where the casino will match a percentage of your deposit. This is like getting free money. The catch is you’ll need to wager your deposit or deposit and bonus so many times before you’ll be able to request a withdrawal.
The good news is that since lotto games are 100% chance, you should have no problem taking advantage of any promotion the casino offers.
Playing Scratch Cards Online
There are real money online scratch cards with many different themes and features, not to mention many ways to win. Scratch games are one of the simplest ways to gamble, but that doesn’t make them any less fun.
In fact, simplicity is a big reason why playing real money scratch-offs is so popular. Sometimes we don’t want to think too much about strategy and making the right decisions. We just want to have a chance to win some cash.
Best Online Casinos With Real Money Scratch Cards
You can play online scratch offs for real money at various gambling websites. But it helps to find a good online casino that gives you many opportunities to win.
Let’s look at a few things available to explore at the best real money scratch-off casinos.
Great Variety of Games
The top online gambling sites showcase many high-quality real money scratch games for play. You can find games that include various rules, although the most popular ones entail matching three of the same symbols.
Great Payouts
The real money prizes you can get from scratch offs can vary by game. You can potentially win several times the initial stake on your scratch game if you can find the rarest symbols.
You can get details on the payouts available on scratch cards by taking a look at what a site says. You can get details on the rules for a game on each card. These include points on any special bonuses available for reaching certain things while playing.
Simple Interface
The layouts on real money online scratch offs can include a simple setup that you can use in moments. An average game lets you use your mouse to scratch off the symbols.
For mobile devices, you can move your finger over the screen to scratch it like you would with a physical card.
Varying Values of Scratch Games
You can play scratch cards in varying values. Some games are available for as little as 50 cents each. Most of these are available for one dollar each.
Some online casino sites let you adjust the values of your real money scratch cards before you buy them.
Great Welcome Offers
The best scratch card online casinos provide appealing bonus offers when you sign up to play. You can complete a deposit and receive a welcome bonus. The total can be a match of whatever you deposit.
You can use your bonus money on scratch cards, although the rules vary among all online gambling sites. You can review the bonus terms on whatever online casinos you wish to utilize.
No Limit To How Many Scratch Offs You Can Buy
You can get as many of the same scratch cards as you wish. Whereas physical cards are limited over how many you can get at once, you can get multiple cards at a time and play with them as much as you wish.
The lack of paper waste from these cards is also positive to see.
Pros and Cons of Online Scratch Games
Real money scratch offs are a lot of fun, and you can win some cash. But you can lose money, too. So, we recommend that you consider the pros and cons of online scratch cards before getting started.
Advantages of Real Money Scratch Games
- Scratch-offs are fun to play. You don’t need to do lots of thinking, nor do you require lots of strategy to play a game.
- You can win big payouts. You could get thousands of times whatever you bet on your card. The point is also true about scratch games that link to progressive jackpots.
- They work for all bonuses and promotions. Most of the best online scratch card casinos will let you use your bonus money on scratch off games.
- You don’t have to spend lots of real cash on these games. You’ll find many scratch offs available for as little as 50 cents. Others can be worth up to $5.
- The themes and formats of these games are fun and simple to understand. You’ll recognize how these games work if you’ve ever seen any traditional instant scratch games at a store that sells lottery tickets.
- You can get as many of these cards as you want from casino websites. You can buy multiple real money online scratch cards at once, so long as you have enough money in your casino account for doing so.
Disadvantages of Real Money Scratch Games
- There’s a high house edge to online scratch cards. The average house edge on scratch offs can be close to 40%.
- There’s no decision-making involved. One thrill of many games on casino websites is that they require you to make choices, whether it involves picking cards or finding specific bets.
- Not all online casinos offer real money scratch cards. This is not a problem at the scratch card casinos we recommend, of course.
- Playing scratch-offs becomes repetitive after a while. There are no real changes in games other than the symbols you’ll find.
- You have to put in plenty of physical effort to scratch the cards. You scratch the cards by clicking on a screen. You have to put in some extra effort to reveal all the things you’ll find on these scratch offs.
Getting Started With Online Scratch Offs
Here’s how you can get online to start playing scratch games.
Signing Up For a Site
Look through the best real money scratch card sites that we recommend, then sign up by using these steps.
- Make sure the site offers real money online scratch offs that you’ll enjoy
- Open an account with the site. You can get this ready with your contact info in moments.
- Complete a deposit. The deposit can work through various means, including credit or debit cards. Some sites support cryptocurrencies.
- Use the appropriate bonus for your account. The bonus should give you extra money to use when playing real money scratch cards, or it might a few free scratch cards to play.
- Enjoy the games, but be sure to play through the bonus total enough times according to the rules.
- You can withdraw your money at any point, provided you have played through the bonus funds, and you have enough to meet the minimum.
Playing the Games
The process of playing online scratch cards for real money is simple. Just follow these steps.
- Purchase your scratch card. Be sure to select the correct amount of money you’ll use for your game.
- Scratch the boxes or other spots on the game.
- See if you meet the proper goals for the game. These may entail matching numbers or getting three or more of the same symbol.
- You’ll see how you can win real money if you meet the rules for winning.
The process for playing real money scratch games will work well on desktop and mobile devices alike. You’ll enjoy how the top scratch card sites offer many ways for you to win something big when you play.
Conclusion
The lottery’s been around for a long time. And it’s never going to go away. It’s far too large a revenue source for US states.
It’s also a source of cheap fun for residents. For a couple bucks, you can buy a handful of tickets and then watch the news or check your newspaper for the winning numbers.
You might get a rush out of it. Many people do.
It’s never been easier to play than it is today, either. Between the internet, your state lottery or the online casino of your choice, you can have your hands on a winning ticket in a matter of minutes.
Give it a shot. You might like it.
State Lottery FAQ
Here are some of the most common questions we receive about state lotteries.
What’s the biggest lottery jackpot ever won in the United States?
The following are the 10 biggest lottery jackpot wins in the United States.
- $1.586 Billion – This is the world’s largest win. It was split between 3 winners on January 13th, 2016. The game was Powerball.
- $656 Million – This happened on March 30th, 2012. This was split between 3 winners. The game was Mega Millions.
- $648 Million – This was split between 2 winners on December 17th, 2013. The game was Mega Millions.
- $590.5 Million – One person won this playing Powerball in May 2013.
- $587.5 Million – Two people split this. This was won by playing Powerball on November 28th, 2012.
- $564.1 Million – Three people won this on February 11th, 2015. This was a Powerball jackpot.
- $536 Million – One person won this playing Mega Millions on July 8th, 2016.
- $487 Million – One person won this on July 30th, 2016 playing Powerball.
- $448.4 Million – This jackpot was won playing Powerball on August 7th, 2013. This was split between 3 winners
- $429.6 Million – This was won by one person playing Powerball on May 7th, 2016.
Where can you go to see the latest lottery number results?
Many, if not all state lottery websites will post recent results. For example, we’re looking at Washington State’s lottery website. They have the Powerball and Mega Millions posted with the option to check your ticket against the most recent draw. You can also click the links to see ‘past drawings.’
What are the odds of winning?
It depends on what game you play. If you play Powerball, the odds can be as high as 1 in 292 million. Though this varies significantly based on the number of people involved and the likelihood that someone has picked the right numbers. On the other end of the spectrum, scratch tickets; these have odds of around 1 in 4. The prizes aren’t comparable, obviously, but with scratch tickets, you can win tens, hundreds or even thousands of dollars. Since these are more likely to pay, these will probably be more fun to play.
Is there a strategy for winning the lottery?
No, it’s purely a game of chance. Your best bet, in all honesty, is not to play it if you care about odds or strategy.
Is there a strategy for winning scratch tickets?
No, these are purely games of chance too. Though, we have seen interesting tips that seem to have logic behind them. For example:
- If you buy multiple tickets, buy the same kind. Many people buy different kinds to diversify or out of interest. But if you have 1 in 4 odds of winning on a particular ticket, the only way to get those odds is to play only that game.
- Only play once per month. This is for the same reason above. You’re better off buying all the same tickets at the same time to take full advantage of the odds of winning.
The other tips were generic, like setting a budget and following the rules you set for yourself. Common gambling stuff. All that said, though, we’ve never heard of anyone making a living or consistent income from the lottery or scratch tickets. They’re games of chance. So any rules or strategy you follow isn’t so much to beat the house but to limit your losses and to enjoy the game as much as possible.
Is there a lotto ticket-checking app?
We came across Lottolotto. What you do is scan your lotto tickets and it’ll monitor your numbers and compare them against the winning numbers. This claimed to scan all lotteries except for the District of Columbia. It’s available on both iOS and Android. However, it looks like it has poor reviews on Android. And it hasn’t been updated in months. Another choice is the Lottery Ticket Scan & Pools for Powerball and Mega Millions. You can participate in lotto pools, quick pick your numbers, get drawing result notifications, and more. But it doesn’t look like this app is highly liked either. Overall, there aren’t many (good) lottery ticket-checking apps in 2016.
Do you know of a good lottery number generator?
Sure. You can use this to quick pick your lottery tickets. You can pick up to 50 numbers for a variety of different lotto games, including Powerball and Mega Millions, as well as state-specific games. What’s neat about this is they tell you your chances of matching all numbers with the combination they give you. You can see it at Random.org.
How do I come up with lucky lottery numbers?
You can use the lottery number generator mentioned above. Here are some other ideas for how to come up with your lotto numbers:
- Use your birth date.
- Use your spouse’s or kids’ birth dates.
- Use your favorite or lucky numbers.
- Use someone else’s lucky numbers or birth dates.
- Use the quick pick option.
- Use previously drawn/won numbers.
- Use the most popular main numbers (in lottery history).
- And here are more stats on the most drawn numbers.
- You can roll dice.
- Pick numbers off a calendar.
We can go on and on. But those should be enough to get you started.
What are the odds of the lottery quick pick?
Your odds are the same whether you choose your numbers or have someone choose your numbers for you.
Say I win the lottery, should I take the lump sum or annual payment?
It won’t matter which way you go in terms of taxes. You’ll owe the government the maximum.
However, tax rates change. If you take the lump sum now, you’ll pay 39.6%. But that could be very different in a few years, which will matter if you’re taking the annual payments.
Business Insider suggests taking the lump sum if you think taxes will go up. However, if you think they’ll go down or if we’ll eventually see a flat tax, then taking payments would make sense.
Of course, that’s only one part of it.
Another thing they looked at is what you’d do with the money. If you invested it, what kind of return (profit) could you see?
They (Business Insider) assumed a payout of $400 million and after-tax amount of $223,600,000. Here’s what this would look like if you invested your money based on the percentage of return you’d get. They also gave you a little bit of walking around money each year – a million worth.
That’s after 30 years.
It looks like you can get a little more taking the lump sum starting at the 4+ percent mark over taking payments.
Now your only job is to figure out how to win the lottery.
