Online Lotteries in the USA

The lottery kicks us right in the “get rich quick” bone. It is the epitome of getting rich overnight. We know the odds are stacked against us, but there’s still something alluring about getting a ticket and wondering “what if?” After all, someone has to win and someone does win every time.

It is that mere specter of a possibility that makes the lottery so successful. We know a lottery ticket isn’t the best investment, but we also know that it is entirely possible to win the big one. And the amount of money is so life-changing that even the stingiest of us break down and buy a ticket from time to time. There’s no shame in that.

Today, 44 states and the District of Columbia have some sort of lottery. Each state has its own mix of instant win scratch tickets and traditional drawing-style games with large jackpots. The vast majority of states require you to visit a retailer in person to purchase tickets, but a few states have moved to online sales of tickets.

Buying Tickets Online

Increasing numbers of states are moving to online sales of lottery tickets. It was long believed that the Federal Wire Act made it illegal to sell lottery tickets online, but as states come under increasing financial stress despite ever-increasing taxes, lawmakers are under tremendous pressure to raise revenue without raising taxes.

Then in late 2011, the Justice Department clarified its stance on the Wire Act. In December of that year, the Justice Department announced that it believed the Wire Act applies only to sports betting. This opened the door for state-by-state sales of online lotto tickets.

Only a few states have actually made the transition, but interest is growing. A few states already sell online lottery tickets and a few more states are looking into the idea. The train of thought goes something like this:

“If we allow online lottery ticket sales, more people will buy tickets. This will lead to increased revenue to the state without raising taxes.”

And so far, it appears that line of thought has been right on the money. Illinois was the first state to sell lottery tickets online and it reported online sales of $425,000 in the first week alone.

Which states allow online lottery tickets today?

Illinois, Georgia, New Hampshire Kentucky, Virginia, Michigan, Pennsylvania and New Hampshire are the only states that sell official lottery tickets or subscriptions online. However, there are numerous other states in various stages of passing laws and setting up systems for selling tickets to their residents.

In these states, you can either buy your tickets in person like normal or visit the official sate lottery website to buy your tickets online. You can buy local state lottery tickets or multi-state tickets such as the Powerball and Mega Millions drawings.

The wheels of government legislation turn slowly, but we expect to see online lotteries come to most states at some point. Some states have no lottery at all, so it will be a long time (if ever) before those states join the action.

State officials like the increased revenue offered by online sales and lottery fans like the convenience. Those two sides will come together at some point and make it happen in most states. In between those sides are the anti-gambling groups that oppose lottery and casino expansions.  Below is a chart of states that have legalized online lottery sites.

Online Lottery Subscriptions

Most states also offer lottery subscriptions that you can use to purchase tickets automatically on a recurring basis. Visit your state’s official lottery website and look around for a “subscriptions” link somewhere. There, you can purchase subscriptions for weeks, months or a year at a time.

With a lottery subscription, you pick your numbers ahead of time and the lottery will automatically buy your tickets and check them for winning numbers. If you win less than $600, the state will send you a check in the mail. If you win more than $600, the state will send you a form with instructions for claiming your prize.

The cool thing about state lottery subscriptions is that many states allow you to register and pay for subscriptions online. You can create an account, check on your winnings, see past results and extend your subscription all from the comfort of home. This is a great option for those of you who can’t outright buy lottery tickets online.

Some states still require you to fill in a paper form and send it in the mail, but most of the state websites that we checked let you do it all online. This is really close to buying online lottery tickets. The only difference is you can’t just log in any time you want and buy tickets at random; it all revolves around subscriptions to specific lotteries for specific amounts of time.

Multi-State Lotteries

Multi-state lotteries are the result of state teamwork. Instead of limiting ticket sales in one state, multi-state lotteries sell tickets in multiple states. With bigger ticket sales come bigger jackpots. Bigger jackpots lead to more ticket sales, which in turn lead to bigger jackpots. It’s a powerful cycle that works to generate enormous jackpots.

Whenever you hear about those massive hundred-million dollar jackpots on the news, you’re hearing about multi-state lotteries. Powerball and Mega Millions are the two largest and most well-known lotteries of this type.

These lotteries are governed by the Multi-State Lottery Association (MUSL). 33 states participate in the MUSL and share their pools to increase ticket sales and jackpots. Some of the lotteries within the MUSL are spread across all 33 states while others are limited to only a few states. Some of these lotteries even extend beyond the MUSL member states.

For example, Mega Millions is played in 43 states, the District of Columbia and the US Virgin Islands. It is no surprise then that Mega Millions is one of the largest. Powerball is also offered in those same areas. In those lotteries, the jackpots routinely reach more than a hundred million dollars. It would be no major surprise if we see a billion dollar jackpot from one of those lotteries at some point.

Is it worth playing the lottery?

The answer to this question depends on how you look at it. No lottery is a good bet from a mathematics point of view. The odds of winning are so low that even a $1 ticket is a losing investment. When you compare the total number of tickets sold to the size of each jackpot, tickets are worth less than the price you pay for them.

Long story short: there are better ways to invest your money. The lottery is not a good retirement plan. If you had to choose between buying lottery tickets and investing in your retirement fund, the retirement fund is the obvious choice.

But again, that’s just looking at it from a purely mathematics point of view. There is absolutely nothing wrong with playing the lottery for fun. If you have a few extra bucks to spare and you want to buy a ticket, then go for it. Even talented mathematicians and statisticians sometimes buy lotto tickets for fun.

The most important thing is to keep it in moderation. Don’t be one of those people wasting every other paycheck on lottery tickets. Keep it simple, spend a few bucks when you feel like it and remember that the lottery is just a good way to spend a little time. If you win, well, that’s even better.