Is the Lottery Worth the Cost to the People Who Lose?

The lottery is the most popular form of gambling in America. People spent about $100 billion on tickets in 2021, and many states promote their games as a way to raise money for good causes. But just how meaningful that revenue is in broader state budgets, and whether it’s worth the cost to the people who lose, are questions worth asking.

One way to think about the lottery is as a form of collective bargaining: people agree to pay a small amount for the chance to win a large prize. It’s an idea that can apply to any situation where there is a finite amount of something desirable and people compete to obtain it. It could be a position, or a big house or a big sum of cash.

People spend millions of dollars on lottery tickets because they have a strong urge to win, and that desire is often reinforced by media messages that suggest winning the lottery will bring happiness, health and longevity. But a careful look at the data suggests otherwise. Lottery results show that winners have a much lower rate of well-being than those who don’t play.

There are lots of theories about why people like to play the lottery, and I’ve talked to plenty of lottery players who seem surprisingly rational. They know the odds are bad, but they’ve figured out quote-unquote systems about buying tickets in certain stores and at certain times of day, about the kinds of numbers to choose, and about how their money is best invested. They don’t have the irrational, desperate feeling that they’re doomed to live in poverty or to suffer from mental illness, and they don’t see their participation as a moral wrong.

Those who don’t play the lottery may not be aware of how much the prizes are, or how the winnings are distributed. Some percentage is used to cover administrative costs, and a portion is typically donated to charity. The remaining money is the prize pool, and it’s usually possible to make small bets that will add up to a substantial sum.

Super-sized jackpots drive ticket sales, and they get a windfall of free publicity on news websites and television. But those oversized jackpots are also making it more difficult for lottery participants to win, and that’s hurting the long-term sustainability of the game.