published Friday, March 30th, 2012

The lottery: Risk and reward

You can't blame people for dreaming big, especially when the subject of that dream is more than $500 million. That's the estimated jackpot for the current multistate Mega Millions lottery. The drawing is scheduled for ll p.m. tonight. Until then, lottery fever across the nation will continue to rise.

No wonder. The huge jackpot, the result of rollovers for several drawings for which there was no winner, is the highest amount for any North American lottery in history. Indeed, it shatters the old Mega Millions record -- a $390 million prize awarded five years ago.

The lure of an unprecedented payout is undeniable, and understandable. The chance to win millions propels sales to new highs. In Tennessee, for example, more than 2.3 million tickets were sold for Tuesday's drawing, in which there was no winner. That's more than seven times the normal daily sales amount. New records are sure to be set here and wherever Mega Millions is played as Friday's drawing nears. Those sales are a boon to the beneficiary of state lotteries.

In Tennessee, for instance, lottery profits go toward education. Lottery officials say that more than $4 million has been raised for education since the last Mega Millions jackpot was won in January. That total is sure to increase considerably before a Mega Millions winner is identified.

Cashiers at several lottery sales outlets in Southeast Tennessee reported a high volume of ticket sales on Thursday and said they expected even heavier traffic on Friday. Similar reports were emanating from Georgia and other lottery states. There is, however, a downside to lottery euphoria and the associated rush to purchase could be the winning ticket to one of the largest paydays in global history.

The truth is that a large number of lottery tickets are bought by those who can least afford them. National and state surveys continue to show that, proportionately, the poor and the under-educated tend to spend a larger share of their income on lottery tickets than those with higher incomes and more schooling. A 2009 Texas poll indicated that instant lottery tickets there were more likely to be purchased by an individual who did not have a job than by an individual who had a job or who was retired. The dream of striking it rich in the lottery, it seems, burns brightest in those who view a winning ticket as their best hope to escape poverty.

There's nothing wrong with buying a lottery ticket in hope of becoming rich beyond one's dreams -- as long as one understands that playing the lottery is a game and not an investment strategy, or a substitute for obtaining an education and hard work. One person or a group that pools its resources to buy tickets ultimately will win the $500-million-plus Mega Millions jackpot. Everyone else who purchases a ticket will be on the wrong side of the 176 million-to-1 odds of making their dream of riches come true.

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onetinsoldier said...

Only the stupidest of people play

March 30, 2012 at 11:47 a.m.
joneses said...

The lottery is a tax on people who cannot do math.

March 31, 2012 at 4:54 p.m.
AFmanager said...

What if you took your $500 and played the lottery? Risking $500 to gain millions is a much better investment than investing in the stock market, from a risk/reward perspective, but a much worse choice in terms of probability. Read more about fast money borrowing on http://speedyloansearch.com/

November 1, 2012 at 3:36 p.m.
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