Mega Millions: Where does the jackpot money come from? Here's a look.

Haadiza Ogwude
Cincinnati Enquirer

The current Mega Millions jackpot is the second largest in history, soaring to $1.28 billion following the July 26 drawing. So, where does lottery prize money come from?

The simple answer is that the jackpot comes from ticket sales. But here's a breakdown of those sales and how much they contribute to the overall prize pool.

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How much of the jackpot is from lottery revenue?

The Mega Millions jackpot is an estimated $1.28 billion for the drawing on Friday, July 29, 2022.

According to Smart Asset, approximately 60% of the revenue from state lotteries goes to winners. States keep the remaining cash after distributing prize money and paying operational and advertisement costs.

For large multistate lotteries, such as Mega Millions or Powerball, 50% of ticket revenue goes toward the lottery’s prize pool. The other 50% goes to participating states, a Mega Millions spokesperson told ABC News in 2018.

What do states do with their shares?

Each state gets to decide how to use the remaining revenue it receives through the lottery. Several states use a percentage of the income to address gambling addiction, while others put it in a general fund for potential budget shortfalls.

Many states also use the remaining funds to support the educational system. 

Last year, Ohio's traditional lottery sales hit $4.3 billion. The state sent $1.36 billion to the Lottery Profits Education Fund, which supports K-12, vocational and special education programs in the Buckeye State.

Indiana, Kentucky and West Virginia also spend a portion of lottery revenue on education, as well as programs that benefit senior citizens, tourism, infrastructure, first responders and more.

How much money goes to lottery retailers?

Lottery retailers collect commissions on the tickets they sell, according to the North American Association of State and Provincial Lotteries.

These commissions vary but typically range from 5% to 8%, depending on the product sold. Retailers may also receive awards or bonuses for cashing winning tickets.

You can buy a Mega Millions ticket at gas stations, convenience stores and supermarkets in Kentucky, Ohio and Indiana.

Mega Millions drawings are Tuesdays and Fridays, with ticket sales ending at 10:45 p.m. Eastern Time.