The Hidden Cost of Lottery Marketing


The lottery is a game in which players purchase tickets for the chance to win prizes based on a random drawing. The prizes range from small items to large sums of money. The game is regulated by governments to ensure that it is fair and legal. The name “lottery” derives from the Dutch noun lot, meaning fate or fortune. The lottery has roots that stretch back centuries. It was first used in the Bible as a way to distribute land and property, and by the Roman emperors for granting slaves.

In the modern world, lottery games are mostly run by state governments. States typically split the winnings between commissions for lottery retailers and overhead costs to run the system itself. This leaves a tiny percentage of the total prize to be awarded to winners, usually less than half.

Americans spend $80 billion a year on lottery tickets. Most of those dollars are spent by people in the bottom 20 to 30 percent of the income distribution. They are disproportionately lower-educated, nonwhite, and male. People in this group often buy one ticket each week or when the jackpot is big. They also tend to have high credit card debt and little savings.

They also have the lowest odds of winning. But the advertising blitzes for Powerball and Mega Millions are so enticing that they still play. They buy tickets in the hope that they will win a few thousand bucks, or maybe millions. It’s irrational, but it’s understandable. They are chasing the American dream in an age of inequality and limited social mobility, with the sense that there’s a chance, however improbable, that it could be their only way up.

But they should know that the chances of winning are slim to none. Even if they win, they will need to pay a lot of taxes on the prize. And they will likely go bankrupt in a couple of years, if not sooner. And they have other things that they could be doing with their hard-earned cash, like building an emergency fund or paying down debt.

The problem with this irrational gambling behavior is that lottery marketing has a hidden cost: it perpetuates a myth that wealth is within reach. This robs poorer people of the ability to invest in their own future. It also makes them feel that the lottery, despite its enormous odds, is their only opportunity for upward mobility.

That’s why it’s important to educate lottery players on how the odds work. But it’s equally important to address the underlying issues of poverty and inequality. Only then will we get closer to a world where everyone has an equal shot at the American dream. In the meantime, let’s make sure that we use those precious lottery dollars wisely. This article originally appeared on the Center for American Progress.