With Americans spending upward of $100 billion a year on lottery tickets, the game is a fixture in our culture. Whether you think people play the lottery because they want to win or they’re duped into it by state-sponsored marketing campaigns, the fact is that lotteries exist and are popular. But just how much money does the lottery actually raise for states? And is it worth the monetary losses that so many of its participants suffer?
The answer to both questions is no. But the reason why is complicated and stretches well beyond the scope of this article. A better place to start is by examining the expected utility of winning a lottery ticket.
As a general rule, the more numbers a person selects, the less likely they are to win. This is because a higher number of combinations reduces the probability that any one combination will be selected. However, the likelihood of selecting a particular number also depends on its importance to the player.
For example, a person who is very religious may prefer to pick numbers that correspond to biblical events. On the other hand, a person who likes to gamble might be more inclined to buy Quick Picks, which give a high probability of selecting numbers related to the player’s birthday, children’s ages or other significant dates.
This is why it’s so important to understand the true odds of winning a lottery. Fortunately, most lottery companies provide statistics after the draw. The image below shows the distribution of winning applications across the different prize categories for a single drawing. The plot is colored to indicate the number of times each application was awarded that position. The fact that the colors in each cell are fairly close is an indication that the lottery is unbiased.