Key takeaways
- A large share of ticket money goes back out as prizes.
- Retailers earn a commission on sales and winners.
- The remainder funds state programs, which differ from state to state.
The main parts
When you buy a ticket, the money is generally split into a few buckets. The exact split differs by state and by game.
- Prizes: often the largest share.
- Retailer commissions: stores earn a small percentage for selling tickets and cashing winners.
- Operating costs: running draws, equipment, advertising and staff.
- State programs: the money that goes to public causes.
Which programs benefit?
It depends on the state. Many direct lottery money toward education. Some use it for general funds, parks, conservation or support for older residents. Pennsylvania's lottery, for example, is known for funding programs for older people.
How to find your state's split
Most state lotteries publish annual reports on their websites showing how money was used.
Why it's good to know
Understanding where the money goes helps keep the lottery in perspective: it's a form of entertainment that also funds public programs, not an investment.
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