Are people who buy lottery tickets idiots?

In My Humble Opinion
21

[QUOTE=dangermom]
I think this is part of what I don’t get about gambling in general. To me, it’s just throwing money into a hole. What’s fun about that? I know people do win every once in a while, but it’s just not gonna happen to me. The idea of purposely budgeting $100 to blow in Vegas because it’s entertaining to throw it away is just totally strange to me.
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I look at it the same way I would any entertainment. A ticket to Disneyland is $66 bucks (or a 2 day park hopper for $132 each for adults), plus overpriced food, plus any trinkets. Two nights at the Grand Californian is $810 for a standard room. 2 adults would spend something like $1100.

We can take a 3 day trip to Vegas, stay cheaper at almost any hotel on the strip (Bellagio and the Wynn excluded) and have a gambling budget for less.

Would I be throwing money away at Disney?

22

How is spending $2 on a lottery ticket and more idiotic then spending $10 to see a movie? In each case, you most likely will never see a return on that money. The movie entertains you (hopefully) for 2 hours. The lottery ticket let’s you dream for a couple of days.

If you have the disposable income, and it’s how you want to spend it, then what’s the problem?

23

[QUOTE=GuanoLad]
They’re not idiots. They just don’t understand how insignificant the odds are of them winning. […] There wouldn’t be any lotteries or casinos if they actually understood the maths.
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Not even. I contribute to the office lottery pool, for fun.

It’s not an investment strategy or anything, and I doubt anyone in our office thinks that we have anywhere near a significant chance of winning anything.

It does afford me the opportunity to occasionally daydream about buying property in Vancouver, if…

Now, my old roommate who spent more than $20 per week on lottery tickets, and spent his valuable time picking numbers on a “wheel” system that he spent money to learn from a mail-order come-on, with the full expectation that eventually it would pay dividends — he was an idiot.

24

I love gambling. I find it fun and exciting and would have no problem plonking myself down in front of a blackjack table or slot machine for 4 or 5 hours and just playing until I am too tired or hungry to keep going. That being said, I buy maybe 1 lottery ticket a year and I might take $20-$30 to the casino once a year or so to play the penny slots for a few hours. I enjoy it very much but I know that it is not a smart way to spend my time or money so I limit myself. There are some people who can’t do that.

Watching other people gamble does nothing for me. That whole televised Texas Hold’em thing is the biggest waste of TV airwaves ever as far as I am concerned. The thrill and excitement comes from being personally invested in the outcome of the game even if that investment is only 3 or 4 cents.

25

I play. Like others have said, it’s worth the price for the daydream.

I buy about 2 tickets a week, sometimes more, sometimes less. I’ll go months at a time not paying to play at all because I’ll win free tickets or $10 or $20 here and there. All told, I probably spend less than $50 a year, which for me is worth it.

I’ll totally admit to being an idiot, though. I do have a general understanding of how ridiculously unlikely it is that I will ever win, but I’m enough of an optimist that the teeny chance I might still thrills me.

26

Yup, that’s me…I’ll drop a dollar or two whenever the jackpot gets a little higher, if I happen to remember or I have change left over from my slurpee or something. For me it’s a little cheap thrill.

27

I play too. A buck or two is thrown away whenever the jackpot exceeds $200 million so I can buy a piece of the dream…

Which means I spend about $6/year on it max, lately.

That amount seems about right, for me.

28

[QUOTE=myskepticsight]
My friend’s grandma is old, her husband is dead, she lives with her daughter and has disposable income.

And damn that lady wins! I know she must spend a decent amount on the tickets, but I was over a week ago and she won $1000, another day $150, etc. At least once a week my friend will tell me grandma won some amount over $50. I told her I’m gonna take her to the casino with me sometime and make her pull the handle on my slot machine.
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I am not sure if you are being sarcastic or not but you know why she wins so often don’t you? It is the same reason my high-rolling grandfather does. He loves to brag about his big wins as well as free limo rides and hotel rooms in Vegas. The casinos don’t actually love him per se but they do love the fact that he blows so much money with them that they are making hand over fist. A side effect of that is that he does hit the occasional big win and lots of little wins to get excited about and brag about. That is exactly what they want. Gambling wouldn’t be nearly attractive if most people never won anything.

The human mind is good at remembering the wins and terrible at calculating the losses over time and that is why it is so attractive to lots of people. It isn’t really possible to play small bets on lottery tickets over time and come out ahead unless you hit a huge jackpot on one of them.

29

[QUOTE=Garula]
It is certainly possible to construct a hypothetical scenario in which buying a lottery ticket is reasonable. Your financial situation could be such that you consider $1 for a ticket utterly inconsequential, but that the potential payout would be life changing. So the minuscule chance of winning would be greater than the $1. In reality, this virtually never applies since even though $1 is pretty small, is not actually as inconsequential as the chance of winning.
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That’s only true if you assume that each person’s utility function is flat or decreasing and you don’t assign any value to variance itself. And I’m not talking about the daydreaming, either. This is true even if you discover the results immediately (like with scratch-off tickets).

Consider two hypothetical lotteries that have mathematically equal odds, ie, your expected value from playing is 0. Each costs $1 to play, and one of them pays $2 1/2 the time, and the other pays $1 million 1/millionth of the time. Many more people would play the second lottery than the first because the utility of $1 million is more than 1 million times $1, so a smaller chance of a big payout is actually worth more than a bigger chance at a small payout. The difference between extreme outcomes is actually worth something to the player. When the payout is just right, it’s worth considerably bad odds, as the many people playing the lottery obviously demonstrate.

The usual claim is that one’s marginal utility is constantly decreasing, ie, that the first $x is worth more than the second $x, but I don’t think that’s true in general. I think that the utility curve decreases for a while, but then increases sharply in the “fuck you” money range, and then decreases again thereafter.

If I win $1million+ in the lottery, it changes my whole life. I no longer have to work at a particular job (I probably can’t just couch-surf forever, but I can take any path that strikes my fancy) If I win $10, $100, or $10,000, I get to see a movie, have a nice dinner out, or buy a fancier car, respectively. All great things, but they pale in comparison to the big score.

A while ago, there was a thread where people discussed the amount of money that they’d accept for a 1/n chance of killing themselves. Regardless of how large n was, very few people were willing to take the bet for $10 or $10000. But when it got to the $1 million+ range, people were willing to take some kind of risk. It was only a small risk, of course, since the potential downside is so great. But this does demonstrate that the marginal utility of money increases sharply at a certain point for most people.

30

[QUOTE=Ravenman]
People pay … to be entertained. Most people who buy lottery tickets use it as a form of escapism … imagine the possibilities of hitting the big one.
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I agree with this, and commend you on putting it so well (sorry to have abridged it a bit).

That said, it sounds to me like we’re describing a broad spectrum of what I’ll term Return On Investment Delusions (or ROIDs) with, IMHO, playing the lottery down toward the if-I-send-this-preacher-my-money-I’ll-go-to-heaven end. At the other end would be, say, if-I-don’t-spend-this-money-I’ll-have-it-available-to-me-to-spend-later (which makes it onto the spectrum because you might put that savings into an S&L or an Enron pension).

31

[QUOTE=Garula]
It is certainly possible to construct a hypothetical scenario in which buying a lottery ticket is reasonable. Your financial situation could be such that you consider $1 for a ticket utterly inconsequential, but that the potential payout would be life changing. So the minuscule chance of winning would be greater than the $1. In reality, this virtually never applies since even though $1 is pretty small, is not actually as inconsequential as the chance of winning. So yes, most people who play are idiots, in the sense that it is not a winning financial proposition.
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I disagree.

I’ll admit it, I have a subscription to the UK national lottery. It costs me £2 a week. That’s about 0.3% of my net income. Put another way, I have to work about eight minutes to earn my weekly lottery subscription.

I know all about payout odds, and I know that the lottery pays out far less than “fair odds” (of course it does, it’s designed to raise money!). But I don’t miss my £2 a week, and it gives me a chance, however minuscule, of winning a life-changing amount of money, while at the same time donating money to worthwile causes.

That £2 a week wouldn’t even buy me a pint in the pub. Why does spending it on a lottery ticket instead of, say, an extra coffee, make me an idiot?
I don’t understand people who say “But the odds of winning are so tiny!”. Well yes they are tiny, but they are infinitely bigger than if you don’t buy a ticket at all.
I should probably also point out that I gamble quite a bit. Not mindless roulette or slot-machine type gambling, but sports betting, where I am using my skill and judgment to try and win money off other people. (Not bookmakers - I use Betfair, which is a betting exchange where you bet against other players, and the site takes a small commission off the winner.) If you know your stuff, it’s perfectly possible to win money doing that, as there is no built-in “house edge”.

32

[QUOTE=dalej42]
Not to hijack the pit thread, but I’ve always thought people who bought a lot of lottery tickets are idiots. Usually, they’re people for whom that $20 (or more) is a decent percentage of their pay. If you make $10 per hour and work 40 hours a week, you’ll spend 5 percent of your before tax pay on lottery tickets?
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I buy lottery tickets every now and then, though not $20 at a time, and I make a lot more than that.

It’s fun.

Really, the thread was answers by Tastes Like Chocolate; there is no economic return from a lottery ticket (well, the possibility of a return is close enough to zero to call it zero) but there’s no economic return to ANY entertainment expense. The return is purely your perceived utility.

33

[QUOTE=RickJay]
I buy lottery tickets every now and then, though not $20 at a time, and I make a lot more than that.
It’s fun.

Really, the thread was answers by Tastes Like Chocolate; there is no economic return from a lottery ticket (well, the possibility of a return is close enough to zero to call it zero) but there’s no economic return to ANY entertainment expense. The return is purely your perceived utility.
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Exactly. Like I said above - my £2 a week lottery expenses would buy me half a pint of beer in the pub or maybe a coffee. I can probably spend longer daydreaming about hitting the jackpot than I’d spend drinking either of those, and with no added calories. :stuck_out_tongue:

34

And that’s what it all comes down to. I don’t buy lottery tickets, but I have no problem with people who buy a resonable amount. To me, that first dollar is worth it because it gets you in the game. The odds are long, but are now non-zero. I don’t think $50 a week makes sense, because 50 times “really small chance” is still a really small chance. But $1 makes sense because “really small chance” is way better than “zero chance”.

When I think about it, I should buy a ticket every week. But I’m forgetful.

35

The reason I started my original thread was my example of the person making $10.00 per hour (400 per week before taxes and deductions) spending $20 per week on lottery. To me, that person is more likely to be an idiot than the person making $1000.00 per week and spending $1.00 per week on lottery.

Lottery seems like an amazingly expensive habit. I don’t have a cite, but I’d assume most lottery tickets are sold to those who are least likely to be able to afford to spend the money.

36

FWIW I do remember reading an article that says the reason most people you see winning the lottery are waitresses and mechanics and the like is because generally speaking white collar individuals are far less likely to play the lottery. When people with money play it is on a rare occasion just as a lark where a lot of lower income people think of it as their only chance at a comfortable retirement so they tend to play much more often.

37

To increase my odds of winning, I buy one lottery ticket. When the lottery gets really really big, to increase my odds of winning, I buy one lottery ticket. The difference being, very large jackpots give me more complicated daydreams. It’s the daydreams I’m buying.

38

Yes, and no. A person who spends a large portion of their money on lottery tickets in the hopes of winning and striking it rich = idiot (IMO), a person who knows they won’t win, but spends a few dollars a week/month/year for shits and giggles = not idiot.

Personally, I fall into the second category. I spend less than 1% of my annual salary on lottery tickets. I don’t do it because I believe I will win, I do it because it’s fun sometimes. Meh. Even I admit it’s a stupid way to spend my money, and yet, I spend much more on much less, so I figure it could be worse.

Besides, I have won more often enough that I think I’ve broken even. My husband used to work with a guy who would spend literally half his paycheck on the lottery – he usually broke even, but there were also months when he had to bum rides due to not being able to buy gas – it was his choice. Did I think the guy was an idiot? Yes. Did he also have months where he made more than enough to justify that month’s purchases of tickets? Yes.

39

People go to casinos to try to beat the odds and take home more than they brought. And people do beat the odds, win jackpots, win lotterys, etc.
What they fail to see is that the more you play, the more reality matches those odds. Over time you end up a loser.
Take blackjack. Have 100 people play one hand and even though the odds are slightly in the houses favor you’ll still have 47-49 winners.
However, have 100 people play 100 hands of blackjack and the real odds will come to light. You’d be lucky to have 2-3 people come out ahead.

Why do hotels comp guests room when they win big? So they play more and regamble their winnings. The casinos know the more that money gets run through gambling cycles the more the odds are slowly going to get their money back to them.

Winners are people who go to Vegas once, leave while their ahead, and never ever step foot in a casino again.

40

My dad, a very intelligent and devout guy, buys two lottery tickets a week. He figures that otherwise he’d spend that $2 on coffee or a candy bar–something that wouldn’t give him the chance to win money. And as he says, you can’t win if you don’t play.