Alabama Ranks Among Most-Targeted States for Lottery and Sweepstakes Scams

October 14, 2025 - Alabama has emerged as one of the top states targeted by lottery and sweepstakes scams, according to a recent analysis by Vegas Insider. With an estimated $18.9 million lost between 2020 and 2025, the state ranks #10 nationally for reported fraud cases related to fake prizes and lotteries. The losses average about $1,430 per scam, highlighting the financial impact on individual residents.

A Growing National Problem

Lottery and sweepstakes scams are a mounting concern across the United States. Over the past five years, consumers nationwide have lost more than $660 million to this type of fraud, with a staggering $351 million lost in 2024 alone. Scammers have evolved their methods, blending artificial intelligence-generated messages, spoofed caller IDs, and fake prize letters to make their schemes increasingly difficult to detect.

"Fraud runs on urgency, secrecy, and emotion," a Vegas Insider analyst notes. "If you didn't enter, you didn't win." This simple mantra underscores the importance of skepticism in the face of unsolicited prize notifications.

Alabama by the Numbers

• Total losses (2020–2025): $18.9 million

• Average loss per scam: ≈ $1,430

• Reports: ~2,569 per million residents

• Victim Impact Score: 52.4 / 100 - 10th highest in the U.S.

• Common tactics: fake international lottery notices, "verification" or "tax" fees, bogus checks, and identity-validation requests

Why Alabama Is a Target

One factor making Alabama particularly vulnerable is its lack of a state lottery; it is one of only five states nationwide without one. This absence leaves residents more exposed to scams framed as national or charitable prize schemes. Scammers exploit this by sending fake notifications and requesting upfront payments for "fees" or "taxes" before releasing supposed winnings.

The Alabama Attorney General's Office and Securities Commission have repeatedly warned residents about these tactics. In a recent federal case, a Jamaican-based lottery-fraud ring specifically targeted elderly Alabamians, instructing them to send cash for "taxes" to addresses in Baldwin County.

National Trends in Lottery Fraud

• $660 million lost nationwide (2020–2025)

• $351 million lost in 2024 alone

• 148% year-over-year increase in impersonation scams, fueled by AI voice and message cloning

How to Spot and Avoid a Scam

Vegas Insider recommends several "Golden Rules" to help consumers distinguish legitimate winnings from fraudulent schemes:

• If you didn't enter, you didn't win. Genuine prizes require actual participation, not surprise notifications.

• Fees equal fraud. Real lotteries never require upfront "processing," "verification," or "tax" payments.

• Bogus checks are red flags. If asked to deposit a check and send back part of the money, it's a scam.

• Pressure and secrecy are giveaways. Real winnings don't expire overnight and don't require silence from winners.

• Social media isn't official. Legitimate lotteries don't notify winners via direct messages, texts, or posts.

• Always verify independently. Use publicly listed contact details, rather than those provided in suspicious messages.

Methodology

Vegas Insider's analysis draws on five years of Federal Trade Commission (FTC) Consumer Sentinel Network data (2020–2025) from all 50 states and the District of Columbia. Their Victim Impact Score combines verified financial losses (weighted at 50%) and reports per capita (50%), resulting in a score on a 0–100 scale. Supplementary sources include the Identity Theft Resource Center, BBB Scam Tracker, FBI Internet Crime Complaint Center (IC3), and the U.S. Department of Justice Consumer Protection Branch.

About Vegas Insider

Vegas Insider provides data-driven insights into gaming, consumer behavior, and financial risk. Their research aims to help readers distinguish legitimate opportunities from costly deception.

Sources

• Vegas Insider analysis of FTC Consumer Sentinel Network data (2025)

• Federal Trade Commission (FTC) - "Prizes, Sweepstakes & Lotteries" data (2020–2025)

• Alabama Securities Commission - Consumer Alert on Lottery & Sweepstakes Fraud

• Alabama Attorney General's Office - Prize & Phone Scam Warnings

• U.S. Department of Justice - Southern District of Alabama Lottery-Fraud Investigation

• Identity Theft Resource Center - 2025 Annual Report

• FBI Internet Crime Complaint Center (IC3) - 2024–2025 Reports

• U.S. Census Bureau - QuickFacts: Alabama

https://www.vegasinsider.com/lottery/lottery-fraud-by-state/