Lottery Profits and Losses

There is a certain inextricable human impulse to gamble, and it is probably true that a lottery jackpot can be enticing. But there is a lot more going on here than just that. Lotteries dangle the promise of instant riches in an age of inequality and limited social mobility, and they know that people will buy into that. They also know that, in the same way that they have reworked sports betting, they can get away with obscuring how much money is raised for states by telling people they’re doing it as a public service.

Super-sized jackpots drive lottery sales, which gives them a windfall of free publicity on news sites and newscasts. But a growing jackpot is also good for business because it makes the odds of winning seem much lower, which is what many people want to believe, so they will continue playing.

Lottery critics typically focus on the problem of compulsive gambling and their alleged regressive impact on poorer communities, but those are not the only issues facing state lotteries. They are in a period of plateauing growth, and they need to develop new strategies for raising revenue. That includes a shift from relying on big jackpots to selling more tickets, increasing promotional spending, and reworking the design of the games themselves. This would increase the number of wins and improve the chances of picking a winning ticket.