You can’t win if you don’t play

The Lottery, with its weekly pay-out of enormous prizes, was the one public event to which the proles paid serious attention. It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne, their intellectual stimulant. Where the Lottery was concerned, even people who could barely read and write seemed capable of intricate calculations and staggering feats of memory. There was a whole tribe of men who made their living simply by selling systems, forecasts, and lucky amulets. Winston had nothing to do with the Lottery, which was managed by the Ministry of Plenty, but he was aware (indeed everyone in the party was aware) that the prizes were largely imaginary. Only small sums were actually paid out, the winners of the big prizes being nonexistent persons.

Nineteen Eighty-Four

With no winners in Saturday night’s record $949.8 million Powerball drawing, the next jackpot could reach an estimated $1.3 billion, lottery officials said early Sunday. . .

Gary Grief, the executive director of the Texas Lottery, told ABC News on Sunday he was surprised to see the results of Saturday night’s drawing. He said 25 players won a $1 million prize and three others won a $2 million prize.

“If you don’t play, you will not win,” Grief advised.

If you’re writing a novel, giving the executive director of the Texas Lottery the name Gary Grief would be way too heavy-handed, but that’s reality for you.

How much do Americans spend on state-run lottery tickets? The most recent figures from the good folks at the North American Association of State and Provincial Lotteries indicate $70.1 billion was spent on such tickets in the U.S. last year. (Canadians spent $10.4 billion, which is actually about 30% more per capita). That works out to about $285 per adult, or $300 per adult in the 43 states that have state-run lotteries.

(By way of comparison, Americans spent about $18 billion on sports tickets, $14.5 billion on books, and $11 billion on movie tickets).

But averages can be deceiving. According to a recent Gallup poll, 57% of American adults reported buying at least one lottery ticket in the last twelve months, which means that the median amount spent on lottery tickets is very close to zero. And of course even the average spent by those who buy lottery tickets is deceiving. The NAASP explains helpfully:

As with any product or service, some people are more enthusiastic consumers than others. Business schools teach marketing students the “pareto principle:” the idea that no matter what the product, 80 percent of the sales will come from 20 percent of the customers. Lotteries are no different. A Minnesota study, for example, found that 20 percent of the lottery players account for 71 percent of lottery income. In Arizona, 24 percent of lottery players accounted for 70 percent of lottery spending, and in Pennsylvania 29 percent of the players accounted for 79 percent of the spending on the lottery.

A little back of the envelope scribbling reveals that, if we assume that about 20% of lottery players account for 70% of lottery purchases, the average amount per year spent on lottery tickets by the 11% to 12% of American adults who “play” the lottery regularly is around $1,800, or $35 per week.

Is this a troubling figure? Why no, not at all, says the NAASP:

In Colorado, for example, people with annual incomes of $15,000 or less make up 7 percent of the population but only [!] 5 percent of those playing the lottery in the past 30 days.

The average annual income of people who make $15,000 or less is around $9,000, or $173 per week, pretax.