Lottery Marketing 101


Lottery is gambling—and, like all forms of gambling, it can be addictive. But lottery marketers understand this, and so their strategies—like marketing for cigarettes or video games—aim to keep people buying tickets. It’s not unusual to find state-run lotteries hawking their wares in supermarket checkout lines, gas pumps, and check-cashing venues. This isn’t surprising, because the mathematics behind the numbers on a lottery ticket, and the way those numbers are displayed, are designed to create an addiction-inducing loop.

Lotteries are a form of public gaming that awards cash prizes based on the number of tickets sold. They are a popular way to raise money for a variety of causes. They also provide a fun and entertaining way to spend time, whether you’re looking for a small prize or a big one. While some states have banned lotteries, others endorse them and regulate the industry. The first recorded lotteries were in the Low Countries in the 15th century, and town records show them raising funds to build walls and fortifications. The odds of winning are usually incredibly low, with only one in three million chances of hitting the jackpot.

In the early United States, state-run lotteries were popular despite Protestant proscriptions against gambling and America’s general aversion to taxation. Lotteries helped fund everything from schools to the Continental Congress, and their popularity grew as American life became more unstable and expensive. For example, in the Great Depression, lotteries surged. Lotteries are often defended by arguing that their proceeds are not taxes and that the money players spend on tickets represents their own, personal choice. This is a flawed argument, as evidenced by the fact that lottery sales rise when incomes decline, unemployment soars, and poverty rates spike. Furthermore, as with all commercial products, lottery advertising is heavily concentrated in communities that are disproportionately poor or black.

Despite these flaws, many Americans play the lottery and have spent billions of dollars on tickets over the years. Most of the money outside winnings ends up back to the participating states, which have complete control over how they use it. Some states put it into a special fund to help struggling citizens, while others invest it into state infrastructure—roadwork, bridgework, and police force, for example.

Depending on the lottery’s rules, winners can choose between an annuity payment or a lump sum. The lump sum option is generally smaller than the advertised jackpot, because of the time value of money and income taxes that can be imposed on winnings. Nonetheless, winning is an attractive prospect for many Americans. They believe that the entertainment value of the purchase outweighs the disutility of losing a large amount of money. In fact, some people even win more than once! Richard Lustig, for example, has won the lottery seven times. He has shared his strategy with others and offers workshops on how to increase your odds of success. To boost your odds, he recommends playing multiple tickets and selecting numbers that are not close together or ones that end in the same digit.