This topic received a lot of attention at Reddit the other day, thought it would be interesting to point-out here:

Basically, low-income households not only spend more, but significantly more money on the lottery when compared to the average US household.

I found that surprising (in fact, just the average US household figure sounds high) does a good job of explaining why that may be (overestimating the low probability of winning, not seeing the money as a significant investment, perhaps seeing it as the only way to get rich, etc.)

Here's the article: http://www.legitgamblingsites.com/state-lottery/

What do you think?

Seems obvious to me.....the poor and uneducated are more desperate to win...
probably see it as the only way they could ever be rich; or at the very least solve all their money problems.........it's a sad and hopeless dream....

This looks like an under-researched area, however i found further support:

it's a good point that they are more desperate to win, but they also have less to lose. This is really interesting with regards to risk aversion:

http://psycnet.apa.org/psycinfo/2011-02123-001/

I would guess that for low-ses populations, you can substitute "gambling" for drugs, alcohol or any other form of addiction, or indeed poor lifestyle choices such as poor diet or lack of exercise. In terms of why, you could probably find correlations for genetics, environment, education, plus perhaps psychological theories such as learned helplessness.

"21% of adult americans believe a lottery would be their most practical way to accumulate $200,000 in net wealth. Among low-income participants, 38% believed the same."

There is much truth in this.

While I am not from the states and have more trouble putting a number on what constitutes for 'low-income' and what is left of that after taxes.. I can believe that it is a way harder to accumulate 200k when one is in low-income bracket. So on this .. the percentages can be interpreted to represent more actual situation than view that low-income people estimate their chances of winning way off from what they are.

on the other hand.. If I read this correctly.. the low-income bracket answers are included in ' adult americans ' results..

Therefore..
for 'average or better' income adults the percentage must be quite a bit lower 21% as the high % of low-income adults is pushing the average up.

Great article. Lotteries are such a scam, and clearly directed primarily at the poor and under-educated. Its bad enough that 50% or more of each dollar is raked off for "education", but about 95% of the remaining 50c is earmarked for the huge prize. That's why you can hit a 1000-1 shot and win like five bucks. And yet the same politicians who sign off on these lotteries could be the same ones trying to shut down internet poker and DFS. Ridiculous.

I wonder which theory is correct:

1. Poor people feel more desperate about their situation so are attracted more to the lottery.

2. The people who are attracted to the lottery (people bad at math, people looking for something for nothing, and people with addictive tendencies) also take other actions that result in them being poor.

Or maybe it is a bit of both.

It's not about being poor or being rich, it's about the mentality. "Poor" people don't want to work hard on something or their dream, so they resort to luck and convince themselfs that this is the only way. They know that the road to bringing them prosperity, health and good relantionships is to hard, so they stay there, in the comfort zone, where some rich people with bad intentions exploit this psihological flaw that they have with lottery, slots, roulette, basically everything that involves gambling.

This.
Yeah not all poor people are lazy people who gamble but im pretty sure everyone or anyone who is poor wants a chance to climb the ladder/make it and be middle classish so you can't blame them for trying to take a shortcut ONCE IN A WHILE. While middle class and upper class groups don't really care much about trying to make it as they've already achieved the "standard" and anything that they do get is considered extra to them i guess (basic logic im getting from this thread and how i see it anyways... sorry if this is a pointless post).

Don't be sorry for nothing man. It isn't a pointless point and even if it was, you don't need to be sorry. I was talking about the poor class that continuosly try to take the shortcut, their minds are so fixed on that, that they either can't see the other door, or they ignore it, hoping they will make this way, rather than than working and going for whatever they want. Of course everyone wants the chance, so we try from time to time and take a shot. But if you study all succesfull people you find out that every single one of them, who had success and a great mentality didn't rely on luck and they made it anyways through hard work accompanied with a dream with goals.

When I say author I don't refer to the author of this thread but instead the author of the article on the web page he linked to.

As a general rule when I read something on the internet, and I don't know the author's reliability, I assume it's FOS, and I see if it can be verified.

There's about 70 billion of lottery revenue in the United States.

There's 123 million households in the United States

Average revenue per household is therefore about 569 dollars.

http://www.naspl.org/index.cfm?fusea...17&pageid=1025

Note: I googled: 70 billion lottery revenue 2014 united states

There's lots of links returned, it appears to be a well-accepted number.

I also googled: 123 million households in the United States

There's lots of links returned, it appears to be a well-accepted number.

i think its just general ignorance. ive told poors that they would have a better chance of making a million off some low wagers if they went to the casino which is not far away. i get blank stares like they had no clue that some gambling outlets have better odds than others.

another thing is that a lot of poors have no clue that when they spend money they have less money. i know this sounds really snarky but its true. they think spending a couple dollars a few times a week adds up to just spending a few dollars. it explains why people who have absolutely no financial resources to spend over $30 a week on cigarettes, still buy cigarettes.

I don't know if anyone cares, but I found this interesting.

If someone instead took the $569 and invested it and got a 9.2% rate of return, they'd have $202K in 40 years.

If you wait 50 years instead, then you'd only need a 6.6% return..for sure doable.

(in before inflation/taxes/all of that other stuff, this was just a thought experiment I was curious about and found interesting/felt like sharing, and I chose the $200K number because that was the money amount used in this thread already)

And addiction to cigs has no part in it?

meh. wealthier people are just as capable to be addicted to nicotine but research shows the less well off spend more on cigarettes. it suggests that the poorer people are making more -EV decisions.

people who make bad decisions make bad decisions

When I used to deliver pizza's the poor people tipped way better than the rich. I'd deliver to a raunchy place with rickety wooden steps that needed to be replaced soon and they'd give a $7 tip on an $18 bill, meanwhile I'd pull up to a big house thinking I was about to cash in and I'd get a buck.

I believe that poor people have a mentality of helplessness about money and always believe it's going to be frittered away anyway so might as well accept it and get rid of it. Gives them something to complain about anyway, a self-fulfilling prophecy.

Rich people see it as they might as well keep it and enjoy it for themselves.

A friend of mine is stupid, as well as having a mental illness, and has come up with many money making ideas but has confessed that he doesn't really believe he'll ever get out of poverty unless it's by luck, ei, playing the lottery. He subconsciously knows but loves to delude himself with fantasies of grandeur.