Americans Spend $100 Billion a Year on Lottery Tickets
U.S. lottery sales topped $113 billion in 2023. That's more than Americans spend on books, movies, and video games combined. Here's where that money actually goes.
The number is so big it almost does not register: $113.3 billion.
That is how much Americans spent on lottery tickets in fiscal year 2023, according to the North American Association of State and Provincial Lotteries (NASPL). Not million. Billion, with a B.
$113.3B
Spent on lottery tickets by Americans in 2023
North American Association of State and Provincial Lotteries (NASPL)
To put that in perspective, Americans spent more on lottery tickets than they spent on books, movies, video games, concert tickets, and sporting event tickets combined. This is the biggest legal gambling market in the country, and most people have no idea how massive it really is.
Americans spent $113.3 billion on lottery tickets in 2023 (NASPL). Lower-income households spend a higher share of their income on tickets than anyone else. The lottery is not a game. It is a wealth extraction system that drains billions from the people who can least afford it, and state governments depend on it.
How Much Does the Average Person Spend?
That $113.3 billion works out to roughly $340 per person across every adult in the United States, according to population data from the U.S. Census Bureau. But averages are misleading. Plenty of people never buy a single ticket. The real spending is concentrated among regular players.
Read more: What Are the Odds of Winning the Lottery?
Among people who actually play, spending typically runs between $50 and $150 per month. That is $600 to $1,800 a year on pieces of paper with a near-zero chance of paying off.
And some states take it much further. In Massachusetts, per-capita lottery spending exceeds $935 per year, the highest in the nation, according to the U.S. Census Bureau's Annual Survey of State Government Finances. New York generates the most total revenue. Texas, Florida, and California are not far behind.
Here is a breakdown of the top-spending states:
| State | Annual Per-Capita Lottery Spend | Total Annual Sales |
|---|---|---|
| Massachusetts | ~$935 | ~$5.9 billion |
| New York | ~$480 | ~$10.7 billion |
| Georgia | ~$470 | ~$6.2 billion |
| Maryland | ~$430 | ~$3.8 billion |
Sources: NASPL, U.S. Census Bureau
Those are not small numbers. In Massachusetts alone, the average household is spending the equivalent of a monthly car payment on lottery tickets.
Who Spends the Most on Lottery Tickets?
Here is where the story turns from surprising to painful. The people spending the most on lottery tickets are the people who can afford it the least.
Research published in the Journal of Gambling Studies has consistently found that lottery spending is inversely correlated with income. The less you earn, the larger the share of your paycheck goes to tickets.
Read more: The Real Odds of Winning the Lottery
Households earning under $30,000 per year spend an average of $412 annually on lottery tickets, according to CBS News. For the lowest-income households, that can represent 5% or more of their total income. Meanwhile, households earning over $100,000 spend about $289, which amounts to less than 0.3%.
Think about that. Families making under $30,000 a year are spending significantly more on lottery tickets than families making three times as much.
$412/year
Average lottery spending by households earning under $30,000
CBS News
This is not random. Lottery retailers are disproportionately concentrated in lower-income neighborhoods. The advertising targets aspiration and desperation in equal measure. The system was built to extract money from the people with the fewest options. And it works because nobody taught them how to see through it.
The term "regressive tax" gets thrown around in policy debates, but the lottery is the most regressive revenue mechanism in American life. It takes from the bottom and funds the state.
Where Does All That Money Go?
Not into your pocket. That much is certain.
Of the $113.3 billion in 2023 sales, here is how the money breaks down, according to NASPL:
- ~60-65% goes back to players as prizes (roughly $65-70 billion)
- ~25% goes to state governments (roughly $28 billion)
- ~5-7% goes to retailer commissions
- ~3-5% goes to operating costs and administration
The state's cut, about $28 billion in 2023, funds everything from education to infrastructure. Politicians love this arrangement because it generates revenue without the political pain of raising taxes. Nobody has to vote for a tax increase. People just hand over their money willingly.
But here is the catch: the effective "tax rate" on a lottery ticket is brutal. For every dollar you spend, you can expect to get back roughly 50 to 65 cents in prize money, depending on the game. The rest goes to the state, to retailers, and to the companies that operate the games.
Compare that to a slot machine, which is legally required to return 80-90% in most states. The lottery has a worse payout rate than the casino. And it is not even close.
Most people we've talked to have no idea where their lottery dollar actually goes. They assume most of it goes to prizes. It does not. The state takes its cut before you ever scratch the ticket.
How Does Lottery Spending Compare to Other Categories?
This comparison makes the $113 billion hit differently.
According to data from the U.S. Bureau of Economic Analysis and various industry reports, here is what Americans spend annually on other categories:
| Category | Annual U.S. Spending |
|---|---|
| Lottery tickets | $113.3 billion |
| Video games (hardware + software) | ~$57 billion |
| Movie theater tickets | ~$9 billion |
| Books (all formats) | ~$28 billion |
| Music (streaming + physical) | ~$17 billion |
| Sporting event tickets | ~$22 billion |
Americans spend more on lottery tickets than on video games and books combined. More than movies, music, and live sports put together.
We talk endlessly about "screen time" and entertainment spending as cultural problems. Nobody talks about the fact that the lottery quietly consumes more money than nearly every entertainment category in the country.
The Lottery Is Not a Game. It Is a System.
State lotteries spend over $725 million per year on advertising, according to NASPL. That money goes toward one goal: making you forget the math.
The commercials never show the odds table. They show the boat, the beach house, the moment you quit your job. They sell a fantasy because the reality, a guaranteed long-term loss, does not make for a good ad.
And the advertising works. A Gallup poll found that roughly 49% of American adults purchased at least one lottery ticket in the past year. Half the country is playing a game where the house takes 35 to 50 cents of every dollar.
Meanwhile, state lottery commissions aggressively promote new games, scratch-off variants, and multi-state jackpots to keep revenue growing. The product pipeline looks less like a public service and more like a consumer goods company optimizing for maximum extraction.
When the Powerball or Mega Millions jackpot crosses $500 million, media coverage creates a buying frenzy. But the odds do not change. They are still roughly 1 in 292 million for Powerball and 1 in 302 million for Mega Millions. The headline changed. The math did not.
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What Else Could That Money Do?
Here is the question the system does not want you to ask.
If a regular lottery player redirected just $20 per week, roughly $1,040 per year, into almost anything else, the results would be dramatic. A high-yield savings account. An index fund. Even Bitcoin through a simple dollar-cost-averaging plan. The vehicle matters less than the habit.
Over 10 years, $20 per week in an S&P 500 index fund averaging roughly 10% annual returns would grow to approximately $17,500. That same $10,400 spent on lottery tickets? You would get back roughly $5,500 in prizes and lose the rest.
The gap is over $12,000. For doing nothing differently except changing where $20 goes each week.
$20/Week for 10 Years: Lottery vs. Real Investments
Net gain or loss on $10,400 total invested over 10 years
Sources: Multi-State Lottery Association, NYU Stern, FDIC, BTC historical data
You do not need a windfall. You do not need to get lucky. You just need to stop feeding a machine that was built to take your money and start putting it somewhere it can actually grow.
That is what makes the lottery so frustrating. The money is real. The habit is already formed. The only thing missing is a better destination for it.
Run the numbers on your own lottery spending. Multiply what you spend per week by 52. That is your annual cost. Now imagine that amount growing at 10% per year for a decade. The gap between those two numbers is what the lottery is really costing you.
Want to see the full math? Read: What if you invested your lottery money instead?
And lottery tickets are just one leak. Daily coffee, impulse purchases, forgotten subscriptions: they all add up. See: The latte factor is real (but it is bigger than coffee)
Frequently Asked Questions
This article is part of the You're Already Wasting Money series on Untaught. The system was built to keep you spending without thinking. These articles exist to help you see where the money actually goes.
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