The Hidden Cost of Lottery


Lottery is one of the most popular forms of gambling and raises billions in revenue for governments around the world. But for many people, buying lottery tickets becomes a costly habit that can drain budgets and reduce quality of life. Studies show that low-income people make up a disproportionate share of lottery players, and critics say it’s a hidden tax on those least able to afford it. In fact, the cost of lottery ticket purchases can eat into savings for retirement and college tuition.

The word “lottery” can mean a state-run contest promising big bucks to the winners, or it can refer to any competition in which the results are determined by chance. In any case, there’s always a low chance of winning. Finding true love or getting struck by lightning are far more likely.

There is no one-size-fits-all strategy for selecting lottery numbers, says Harvard statistics professor Mark Glickman. But he suggests avoiding picking the birthdays of family members or other significant dates and opting for numbers that hundreds of other players might also pick (e.g., 1-2-3-4-5-6). That way, if you win, you’ll have a higher chance of dividing the prize with other winners.

In the United States, you’ll need to keep in mind that federal taxes will eat up 24 percent of your winnings. Plus, you’ll have to pay your state and local taxes. And if you’re lucky enough to hit the jackpot, don’t forget about the investment fees charged by financial advisers and other professionals.