Payouts Today Vs. 1985

The passage of time seems to have a way of tinting to our impressions. At least that’s my interpretation of why the following question is a regular in the lottery’s inbox.

It may come in with slightly different wording than this, but the sentiment is the same: Is the payout on your scratch tickets lower today than when the lottery started? The answer, quite simply, is no. In fact, our payouts today are higher than those in any of our initial games.

When the Iowa Lottery started back in 1985, we sold one scratch game at a time compared to the two dozen or so we have for sale at any one time now. The payout percentage in the lottery’s initial games was about 50 percent. Depending on the game, our instant-scratch tickets today have prize percentages between 57 and 75 percent.

That’s a trend you’ll find across the lottery industry: Over time, payouts have increased. If you check out the Minnesota Lottery’s Web site, you’ll see that they’ve answered the same question in the same way. 

Why? Higher prize percentages mean more winning tickets, which means more people buy lottery tickets. That ultimately creates higher overall lottery sales and more profits for the worthy causes helped by lotteries. The end result is that players are happy because they win more prizes, and everyone benefits because more money is available to help valuable state programs.

Now, I wonder how long it will be before that question shows up again in our inbox?