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Good Question: Where Does Money From Lottery Ticket Sales Go?

MINNEAPOLIS (WCCO) -- Since the beginning of the current record-breaking Powerball run, Minnesotans have bought $50 million worth of Powerball tickets.

But, not all of that money goes to prizes. That's why Marlene, Lloyd, Deb and Robbie want to know: Where does all the money go? Good Question.

According to the Minnesota Lottery, each $2 Powerball ticket can be separated out into prizes, administration and money that goes directly to the State. It breaks down as follows:

  • $1 -- Prizes
  • 12 cents -- Retailers
  • 4 cents -- Vendors
  • 46 cents -- Minnesota General Fund
  • 28 cents -- Environment and Natural Resources Fund
  • 5 cents -- Game and Fish Fund
  • 5 cents -- Natural Resources Fund

Since Minnesota introduced the lottery in 1990, all of the lottery games have brought in $2.5 billion dollars for the state. Lottery officials estimate this Powerball alone could bring in more than $20 million to the general fund and the conservation/environmental funds.

In 1998, Minnesota voters approved a change to the state Constitution that would allocate a percentage of the lottery money to those conservation/environment funds.

"These are great projects like fishing piers, state parks improvements, visitors centers, a lot of great research," says Debbie Hoffmann, a spokesperson for the Minnesota Lottery.

Fifteen states use their lottery money to fund education. Wisconsin uses it as property tax relief.

The state and federal government also make money from taxes on the winnings. Since 1990, Minnesotan lottery winners have paid $113 million in state taxes on their winnings.

With this $1.5 billion Powerball jackpot, a winner could choose the lump sum of $930 million dollars. Right away, Minnesota would withhold $232 million in federal taxes and $67 million in state taxes. According to an analysis from the Tax Foundation, the sole jackpot winner would also likely owe another $135 million by the end of the year because they'd now be in the highest-tax bracket.

That leaves the winner with $495 million.

"It's definitely still worth it," says one Minneapolis man.

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