Michigan sold $4.9 billion in lottery tickets last year, or $500 per resident

Michigan loves its lotteries.

The Michigan Lottery Commission reported $4.9 billion in sales last year, the equivalent of $500 for every resident in the state, according to an annual report from the agency released this week.

Prize winnings last year were the highest ever, over $3.1 billion, while $1.25 billion in sales went to the state education fund (the second most after $1.43 billion in 2021.)

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But the report also shows Michigan is one of the stingiest states in payouts: Prize money represented over 60 percent of all sales, with the state ranking 29th out of 37 comparable states.

Correspondingly, Michigan had the sixth-highest rate of returning money to the state government.

By law, the lottery must send all net proceeds to the state. Spokesperson Jake Harris said there is no set percentage it must return.

In the last five years, total lottery sales have jumped 47 percent in Michigan, rising nearly $1.57 billion, including an 80 percent increase in the amount spent on instant tickets.

Scratch-offs now account for nearly half of all lottery sales, compared to a third of all sales a decade ago.

One of the big lures in 2022 was a new $50 scratch-off ticket, Diamond Riches, the first time the lottery had an instant ticket that cost more than $30. The new contest marked the 50th anniversary of the Michigan Lottery.

“It’s something our players have been asking about for years,” Harris said. “It paid off.”

Two people have bought winning tickets that came with a $6 million prize, one from Cheboygan County in July and one in Alpena County a few weeks ago.

The lottery’s online games, called the iLottery, has grown rapidly as well, from $18 million in 2015 to $193.2 million in 2022. 

But that is a fraction of the total compared to the scratch-offs ($2.4 billion) and the $1.07 billion for the Daily 3 and 4 draw games.

The big national lotteries —  Powerball and Mega Millions — have the most up and down sales in Michigan, with huge $1 billion pots attracting non-traditional players. 

“It definitely gets people off the sidelines,” Harris said.

The two games had $336 million in sales in 2019, but fell to $207 million in 2020, perhaps because of the pandemic. That rose to $344.5 million last year, when there was a $1.33 billion Mega Millions pot in July. (A $2 billion Powerball jackpot in November fell outside the 2022 fiscal year.)

The annual report showed that Michigan residents spent the third-most per capita on lottery tickets, trailing Massachusetts ($832 per capita) and Georgia ($522 per person) have higher per-capita rates.

In terms of total sales as a percentage of the state’s total economy (its gross domestic product), Michigan again ranked third, behind Massachusetts and South Carolina.

Those increased sales have created a growing pot for the state School Aid Fund, used primarily to fund K-12 education, but also some is spent on higher education.

In 2013, the lottery contributed $734 million to the school aid fund. It crossed $1 billion in 2019 before hitting its peak last year.

In the 2022-23 fiscal year, lottery money is expected to comprise 7 percent of the total $17.6 billion fund (sales taxes, the largest source, make up $7.9 billion).