Lottery plays on a fundamental human desire to dream big. That’s why eye-popping jackpots are more common than ever, even as the odds of winning them decline. “Human beings have a very difficult time developing an intuitive sense of how likely risks and rewards are,” says Victor Matheson, an economist at the College of the Holy Cross. “And this is particularly true when it comes to lottery-sized prizes.”
That’s why most state lotteries use tactics that encourage people to play more often, and in higher amounts. The goal is to keep revenues growing, so the state can pay out larger prizes and reinvest in infrastructure, education and gambling addiction initiatives.
But that business model puts states in a tricky spot. Because the chance of winning a major prize is small, most lottery winners end up getting their money back. Only the most avid players — about 10 percent of all ticket purchasers — make enough frequent purchases to keep the lottery going. The rest of the revenue gets divvied up between commissions for retailers and the overhead costs for the state lottery system.
As the lottery becomes more popular, states need to keep introducing new games to maintain or increase revenues. That’s why they often feature a wide range of themes and designs, from scratch-off tickets to more traditional drawing methods. In many cases, those innovations aren’t designed to improve the odds of winning but to make the game more entertaining for the public.