Should You Buy Lottery Tickets? Understanding the Odds & Potential Rewards

Yes, sometimes you should play the lottery. Why?

Well, if anyone out there has watched poker on TV, or ever played with anyone who is fairly serious, you will be familiar with the term “pot odds.”

Basically, pot odds states that the amount of money in the pot is sufficient enough to justify calling the bet. In this case, the bet would be the $1 lottery ticket, and the pot would be the jackpot.

The $390 million Mega Millions jackpot from the March 6, 2007 drawing is one example of a time when a $1 bet is a good bet. Your odds of actually winning the main jackpot are one in 175,711,536. Based on the odds, if you purchase 175,711,536 different tickets, you will win the jackpot 1 time. You could also win many other smaller prizes ranging from $1-250,000. And every losing ticket would count as a gambling loss for tax purposes. Of course, you would also have to pay federal and local taxes on the winnings.

When Should You Play the Lottery?

I usually buy one ticket anytime the jackpot is higher than the stated odds of winning the jackpot. For the Mega Millions lottery, that means I will buy one ticket anytime it gets around $175 million or so.

Does that mean you should go out and spend your life savings on lottery tickets? Hell no! The actual expected rate of return over the long run is $.50 on the dollar.

But to spend $1 for fifteen minutes of dreaming is good, cheap fun. I’ll be the first to admit, the idea of winning the lottery, and the thrill of watching the numbers being drawn is exhilarating. It’s a fun thing to do, but it can easily become addicting. Just like any other type of gambling, you can find yourself wasting hundreds and hundreds of dollars buying lottery tickets.

Did I buy a lottery ticket on the 6^th? You bet. I won $7.

Playing the Lottery Can Be Fun, but Don’t Let it Run Your Life

Winning the Lottery can be life changing. But so can playing the lottery. It’s fun to dream about wining, but don’t let that dream become all-consuming. Playing the lottery every once and awhile can be a fun way to spend a few dollars on entertainment – no different than going to see a movie. But it can become a problem when you are spending too much of your disposable income when the odds are clearly not in your favor. If you think you are spending too much money on lottery tickets, then it’s possible you may have a gambling addiction.

Warning Signs of Gambling Addiction

I thought it was important to add a few warning signs of being addicted to gambling life buying lottery tickets. Playing the lottery is a game, and it should always be treated as one. If it becomes more than that, you should get help as quickly as possible.

Some common signs of a gambling addiction include:

• Hide money for bills to gamble
• Gambling out of boredom or to escape stress
• Borrowing money to gamble
• Gambling longer than they planned
• Missing work or appointments
• Unexplained changes in behavior
• Losing sleep because thoughts of gambling

If you or someone you love is experiencing any of these symptoms, you should get help. I love playing the lottery when it gets big enough. It’s a fun way to spend a dollar or two, but it should never become a destructive habit. There are dozens and dozens of programs or help centers that can help you or a loved one kick a gambling addiction and get back on track.

Related Post: How We Manage Our Money on a Daily Basis