There’s been a lot of hubbub in the news lately about an enormous lottery jackpot. My advice to people is to save their money. Don’t play. Suppose you buy up every single possible ticket, guaranteeing a jackpot. Even though you win, you still lose. Lotteries keep about 30 to 35 percent of the proceeds, so you’re guaranteed to lose that much money, plus whatever taxes you pay. That’s why state lotteries have slogans such as “Supporting Virginia’s public schools.”
If you’re still the gambling type, go to a casino. Most of their games only have a 5 to 10 percent built-in house advantage. The government made it illegal for anyone besides the government to conduct a lottery because the house advantage for lotteries is 30 percent or more. It is by far the worst way to gamble.
This is not a new insight. As Adam Smith put it back in 1776 (previously posted here):
There is not, however, a more certain proposition in mathematics, than that the more tickets you adventure upon, the more likely you are to be a loser. Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer you approach to this certainty.
(Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 124-25.)