The lottery is not a fool’s game

Although it isn’t usually a sound financial investment, the lottery can reward players in other ways.

by Jasper Johnson

Earlier this month, the Powerball jackpot reached a record high just shy of $1.6 billion. Despite its popularity, I often see people bemoan this form of gambling as silly and irrational. However, I argue that we can’t simply write off playing the lottery.
Economically, playing the lottery can make sense. I often hear people speak of the expected returns on a lottery ticket and the probabilistic calculations for a return on investing in it. 
However, I believe we should address gambling and the lottery based on the economic utility involved in playing the game instead of viewing someone’s choice to buy a lottery ticket merely as a financial investment. What people get out of playing the lottery isn’t about sound financial returns; instead, people enjoy fantasizing about such a large sum of money. 
Additionally, there’s the joke about the smoker’s Ferrari. The setup is that a non-smoker criticizes a smoker for spending money on cigarettes, calculating that the smoker could have bought a Ferrari with the money he or she spent on cigarettes over the years. 
The smoker responds to the non-smoker by saying, “Then where’s your Ferrari?” 
This joke demonstrates that although (theoretically) there could be detriments from routinely spending small amounts of money, they rarely result in obvious differences between people who spend and people who don’t. 
Of course, playing the lottery obviously doesn’t benefit chronic gamblers and people who can’t reasonably afford to play. But for those who can afford it, the thrill of the massive potential reward often makes the price of the ticket worth it — even if it isn’t sound from a financial investment standpoint.
Jasper Johnson welcomes comments at [email protected].