First, let me say that I am NOT (that is NOT) advising anyone to play the lottery.
Second, if you are gambling and it’s out of control, contact Gamblers Anonymous. Gambling can be fun, but it can also be very damaging and addictive.
Lotteries come in a huge variety of forms. There are state-run lotteries, country-run lotteries, and illegal lotteries. There are lotteries with small prizes and relatively good odds of winning, and lotteries with huge prizes and a very very small chance of winning, and all sorts of levels in-between.
Two things all lotteries have in common
All lotteries have two things in common:
1) You can’t win
That is, long term, you cannot beat the lottery. The odds are against you, and there is a “house take” or “vigorish” that varies from lottery to lottery, but is always there. For example, in one popular lottery game, you have to pick a three digit number. If you guess it, you get money. In New York State, I believe the payoff is $600 for a $1 bet; but the fair payoff on this form of lottery is $999. If you play this over and over, you will lose.
There is no way to get around this, unless you cheat somehow, and lotteries go to great lengths to prevent cheating and to make the numbers chosen impossible to guess.
The second thing that all lotteries have in common is
2) I don’t play them.
So, why am I writing this article? Surely, the answer is “no”?
Two types of lottery games
First, let’s divide lotteries (somewhat arbitrarily) into “big prize” games and “little prize” games. The reasoning behind why you might play is different.
In a little prize lottery game, if you play regularly, you can expect to win sometimes. If you take that 3 digit game, you will win, on average, once in every 1000 tries. If you play 5 times a week, that’s one win every 4 years or so. If you play 10 times per week, that’s one win every two years or so. It’s not exactly common, but it will happen. It’s just that the amount you’ve paid out will almost certainly be more – probably much more.
In a big prize lottery game, you are very unlikely to win, ever. For example, in mega millions , there are over 175 million possible combinations. It is VERY unlikely that you will win, and, even if you do win the big prize, you might have to share it (see that link for lots more info). Note that in mega millions, and other similar lotteries, there are often smaller prizes for matching some numbers.
So, why would you play?
Reasons to play a small prize lottery game
Well, for a small prize lottery game, there are things besides money. There’s excitement. For some people (not for me) there’s a lot of excitement in scratching off the numbers and seeing if you’ve won anything. Or waiting and seeing the numbers in the newspaper or on TV. People pay for excitement in all sorts of ways, and the lottery can be one of them. Other people may just find it entertaining, and, again, people pay for entertainment in all sorts of ways.
Or maybe you like splurging every once in a while; and lack the discipline to save your money. Maybe spending $10 a week isn’t a problem for you, and getting back $600 every couple of years is worth it.
Remember, though, in the long run, you will lose money, even though you will win every once in a while.
Reasons to play a big prize money game
This is quite different. There is still the excitement factor, but now, the prize will change your life. IF, of course, you win it. The prizes in these games vary, because they build over time if no one wins, but they are often in the tens of millions of dollars. Unless you are Bill Gates or similar, winning tens of millions will change your life.
But many of the people who have won the tens of millions have found that the changes weren’t all good. All of a sudden, every wants you to buy them things; some people spend so profligately that they wind up broke.
The bottom line: Should you play the lottery?
As I said, I never play. So, that’s my answer. But your answer may be different. Just know that, long run, the odds are against you, and don’t gamble with money you can’t lose.