The lottery is a popular way to win a lot of money. But the chances of winning are extremely low. And even if you do win, you’ll have to pay taxes on the prize and spend it on something else. So is it a good idea?
Khristopher J. Brooks is a reporter for CBS MoneyWatch, where he covers business news and economics. He is also a former reporter for the Omaha World-Herald and the Newsday. His reporting focuses on the U.S. housing market, the business of sports and bankruptcy.
The drawing of lots to determine ownership or rights is recorded in ancient documents, including the Bible. It became common in Europe in the fifteenth and sixteenth centuries, raising funds for towns, wars and colleges. In the United States, state governments grant themselves exclusive rights to operate lotteries.
Americans spend $80 Billion a year on the lottery, but only a tiny fraction of them win big. Most who do, however, go bankrupt within a couple years. It’s important to consider all the pros and cons before spending your hard-earned dollars.
People who play the lottery often choose their lucky numbers based on significant dates, such as birthdays and anniversaries. But this strategy can reduce your odds of winning by increasing the number of other people who choose those same numbers, Harvard statistics professor Mark Glickman says. Instead, he suggests playing random lottery numbers or buying Quick Picks. The best way to improve your odds of winning is to play a smaller game with less players, such as a state pick-3.