There are probably few of us who have not at one time or another overestimated our luck at winning a lottery and in so doing bought a ticket. And the larger the prize, the longer the lineups to buy a ticket.
The reason why lotteries are such successful fund raisers is the same reason why the ticket holder is nearly certain not to win. In fact, to purchase more tickets only increases that certainty of not winning. Here is what Adam Smith wrote about lotteries in his great work, Wealth of Nations, in 1776:
There is not, however, a more certain proposition in mathematics, than that the more tickets you adventure upon, the more likely you are to be a loser. Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer you approach to this certainty.
Every time I have purchased a lottery ticket (once or twice in a year), I think of Adam Smith’s mathematical warning. And every time I lose (which is every time!), I wonder why I didn’t heed his warning.
Buying a lottery ticket for the anticipation of that tiny chance you might win big may be an enjoyable experience, so even the awareness of the ‘certainty’ of losing will not deter the occasional purchase.
But make no mistake — in terms of financial gain, when it comes to lotteries, the non-ticket buyer is further ahead than the ticket buyer, especially when compared with larger sums of cash outlay. If it’s wealth we seek, stick to the get-rich-slow version of financial planning.
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