Lottery Advertising Misleads People About the Odds of Winning

The lottery is a huge industry and the most popular form of gambling in America. People spend over $80 Billion a year on tickets. But the odds of winning are slim and the money is taxed heavily. Instead of purchasing a ticket, you can try building up your emergency fund or paying off your credit card debt.

State lotteries were developed during the post-World War II period when many middle-class and working class families had a little more breathing room in their budgets. The belief was that the lottery could provide revenue for a wide range of services without excessively burdening the tax base. It was a flawed idea. That arrangement is now coming to an end because of inflation and the cost of a very expensive war. The states need more revenue to pay for the basic functions of government and to fund some of their social safety net programs. But the lottery is not a good way to raise that money because it is regressive and because it encourages people to spend more than they need to on the improbable hope of winning.

A lot of lottery marketing focuses on the idea that winning the lottery is fun and that the experience of buying a ticket is exciting. That’s a savvy marketing strategy that helps to obscure the fact that the lottery is really a dangerous and regressive enterprise. Lottery advertising also often deceives people about the odds of winning. The ads commonly mislead by presenting misleading information about the odds of winning, inflating the value of the jackpot (lotto winners typically receive their prizes in equal annual installments over 20 years, and the value is significantly eroded by taxes and inflation) and so forth.

In the early days of lotteries, players would buy tickets in advance of a drawing held at some point in the future. But innovations in the 1970s led to the introduction of “instant” games where the public can purchase tickets that are valid for a single drawing that takes place immediately. The result was that lottery revenues grew quickly, but then began to level off and eventually decline. To maintain or increase revenues, lottery officials have introduced a constant stream of new games.

Lottery advocates point out that public support for the lottery is strong because it is viewed as a way to promote a specific, desirable public service. That argument is particularly effective in times of economic stress, when voters might be tempted to reject proposals for tax increases or cuts in public services in favor of the hoped-for benefits of the lottery.

But even when states are in relatively good financial health, lotteries continue to draw broad support. They have become an entrenched feature of American politics and culture.