Poor spend 9% of income on lottery ticketsThe Consumerist recently had an interesting post about a study that shows that poor households, with annual take-home incomes under $13,000, on average, spend $645 a year on lottery tickets, which comes to about 9% of their yearly income.

While the study is about two years old, I doubt things have changed much since then, and it got me to thinking about how I grew up. My parents never played the lottery, but I have a grandmother who did -- and probably still does -- and I had a lot of uncles and aunts who also played. One might think that would have influenced me to play, but if anything, it probably did the opposite. After all, even when I was eight years old, I could see that my uncles and aunts, despite playing the lottery every day, weren't exactly rich. And my relatives always made it clear that they knew they were on a fool's errand.

How foolish? Well, according to Powerball's website, the odds of winning the grand prize are 1 in 195,249,054.

So why do people without a lot of money play the lottery, especially if they know that the odds are against them? I have some theories, ranging from the obvious to, hopefully, the insightful.

The hype is hard to ignore. As I'm writing this, the winnings for the next Powerball -- arguably the best known lottery, though obviously there are a lot of different lotteries out there -- is at $220 million. Now, I hadn't read about this $220 million figure until I started researching this post, so I'm guessing it's not that big of news. But if nobody wins the next drawing, or the next, and that jackpot gets bigger, the media will start covering it more. (Wikipedia states that the highest Powerball jackpot was in 2006 for $365 million.) And the more people who start buying into a lottery, the harder it can be to resist -- even if your logical side tells you that the odds of winning are virtually impossible and that your money would be better served staying in your wallet. Still, it's easy to understand why someone with almost no cash would want to buy into the possibility of having more income than they know what to do with.

Playing the lottery can feel like you're being a responsible person. This one's just a guess. I've been very cash poor in my time -- no secret there -- but I've probably only played the lottery twice in my life. Still, I can see how when you're looking at a bank account with very limited resources, and your dreams, hopes and goals are unlimited, you feel a real sense of helplessness when you don't have the means to make anything significant happen. So even though the odds might be a gazillion to one, the act of doing something that could make all that financial pain go away probably feels like a responsible financial move.

It can become a ritual. Growing up throughout the 1970s and 1980s, I'd watch my relatives, every evening, gather around the TV to see the numbers pop up on the lottery machine.

I'm sure a folklorist would have had a field day with some of my relatives. Some of them, who I would probably classify as the working poor, wrote down their numbers on a pad of paper, tracked how close they came on each day for the week and then would discuss their reasons for picking their combination in the same way scientists might reveal why they came to a conclusion for a certain theory they're advancing. One of my uncles would buy tickets for several of his brothers and sisters in the morning, then they'd pay him back at some point during the day or week, and in the evening, they'd watch the TV and call each other to discuss how they did or didn't do.

In other words, this wasn't just about picking some numbers -- they were using the lottery to fuel each other's daydreams and aspirations, and to discuss it in a way that people today might dissect the Lost or American Idol finale on Facebook. They were losing money every day, except for those rare occasions when someone would actually win something, but they were getting something from their money, too. You could look at it as if they were paying daily dues to belong to a lottery club.

But having a reason for playing the lottery doesn't translate into having a good reason. I almost felt physically ill when I read that some of the nation's poorest people are spending 9% of their annual income playing the lottery. They, of course, are playing it because they're desperate, and in the long run, it's arguably the lottery fueling this desperation. That most lotteries are run by the state governments for a willing public isn't just sad, but a national financial tragedy.

Geoff Williams is a regular contributor at WalletPop. He is also the co-author of the new book Living Well with Bad Credit.

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13 Comments

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mahrap1

CORRECTION, I MEANT TO SAY I SEE MORE PEOLPE WHO CANNOT AFFORD TO LOOSE MONEY TAKE A CHANCE.

December 11 2013 at 10:53 PM Report abuse rate up rate down Reply
mahrap1

I LIVE IN THE STATE OF MASSACHUSETTS. I HAD TO HEAR FROM A FRIEND IN RHODE ISLAND THAT MASSACHUSETTS HAD A PROFIT OF 9 BILLION DOLLARS FROM THE SALE OF LOTTERY TICKETS IN 2012. I DON'T BELIEVE THAT OUTRAGEOUS FIGURE WAS EVER POSTED FOR THE STATE'S PUBLIC TO VIEW. IT ALSO SEEMS LIKE YEAR AFTER YEAR, THEY TAKE MORE MONEY OUT OF THE PRIZE STRUCTURE, MAINLY TO SATISFY THEIR INSATIABLE APPETITE FOR THE PUBLIC'S MONEY. FIRST THERE WERE 1 AND 2 DOLLAR TICKETS, THEN 5.00 TICKETS, AND EVENTUALLY THEY SAID "WHAT THE HELL, MAYBE THE FOOLS WILL BUY 10.00 AND 20.00 TICKETS AS WELL. THEY WERE RIGHT!! I SEE MORE PEOPLE WHO OBVIOUSLY CAN AFFORD TO SPEND THAT KIND OF MONEY TAKE A CHANCE, THINKING ,WELL, MAYBE I WILL WIN BIG! IT JUST DOES NOT HAPPEN. THEY END UP LEAVING THE STORE FRUSTRATED BECAUSE THEY JUST DROPPED 10, 20, OR EVEN MORE THAT THEY REALLY COULD NOT AFFORD TO LOOSE. FROM WHAT I CAN SEE, I WOULD SAY THAT ATLEAST 70% OF ADULTS IN THIS STATE ARE ADDICTED TO THE MASSACHUSETTS STATE LOTTERY. AAND THE WORSE THING ABOUT THE SITUATION IS THAT THE STATE IS STILL CRYING POOR!!!

December 11 2013 at 10:48 PM Report abuse rate up rate down Reply
iphonerulez

I can't blame the poor for playing the lottery. They're just trying to survive. It's nearly impossible when there are people like Bill Gates and Warren Buffett holding on to most of America's wealth. If you're one of the minority races, you're S.O.L. America is the white man's land and they're not giving up anything to anyone. If anything, they're trying to take away what little money minorities have hoping they'll just die away and leave the rich man more money.

May 19 2013 at 2:24 AM Report abuse rate up rate down Reply
2 replies to iphonerulez's comment
Billy

Give up anything? What happened to going to work for it?

September 17 2013 at 3:24 PM Report abuse rate up rate down Reply
blkcatted

people who do not have anything always seems to think they are owed something ,I was poor ,but I took advise from my grandfather ,live below your means and save ,no one gives you nothing ITS NOT WHAT YOU MAKE IT IS WHAT YOU SAVE

December 16 2013 at 1:47 PM Report abuse rate up rate down Reply
Nestor

Not much pity here for ignorant people. Put that 9% starting now at $12 per week in a good growth mutual fund for 40 years and you will have about $400-500,000. Playing the lottery for 40 years you will have $0. Oh, I forgot, we can't invest in stocks because they are dangerous and someone might lose money!

May 18 2013 at 11:32 PM Report abuse +1 rate up rate down Reply
1 reply to Nestor's comment
merstockgto

You are so right

December 13 2013 at 12:08 AM Report abuse rate up rate down Reply
toddpugz

I work in a convenience store and the way some people are addicted to the lottery is downright sickening. I see people every day who scrape together their last few pennies to play the lottery. Even worse are the ones who claim the lottery is "fixed" but continue to play it on a daily basis. And let's not forget those who actually "study" past numbers thinking it will give them some insight into the next day's numbers.

March 24 2013 at 3:25 AM Report abuse rate up rate down Reply
Jon Secrist

Your ideas are good but obviously you never been so poor you could not see a way out..That's why poor people play the lottery, desperation. The same way people have been known to die in the desert and eat sand just before dying. Poor people buy lottery tickets because they see it as the only way out. I wonder what present of lotteries income is from people living at or below poverty level.

June 13 2012 at 11:40 PM Report abuse +1 rate up rate down Reply
2 replies to Jon Secrist's comment
merstockgto

If I was desperate I would not be throwing my money away

December 13 2013 at 12:09 AM Report abuse +1 rate up rate down Reply
blkcatted

i WAS POOR GROWING UP in fact I left home when I was 14 ,there is no exscurse for people thinking someone owes them something or the only way out is lady luck
sorry but bottom line is get A JOB and save ,end of story

December 16 2013 at 1:44 PM Report abuse +1 rate up rate down Reply
lactaid220

also something to check out..lottery generators based on most/least common numbers historically: www.lottopick.in

April 20 2012 at 3:25 PM Report abuse rate up rate down Reply
Jose Diaz

Lottery Strategy That Will Work for You

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January 25 2012 at 1:44 PM Report abuse -1 rate up rate down Reply