Why Do People Waste Money Playing the Lottery?

08 Nov

Whether it is the United Kingdom, or the rest of the world, a pretty good chunk of people are addicted to playing lotteries, even though most of them never win anything major throughout their entire lives. On the other hand, around ninety nine percent of the people who win something from the National Lottery games in the UK re-participate in them, being convinced of another win.

The most obvious reason of why people participate in these lotteries is because its reward could potentially be enough to last several generations. According to statistics, around forty percent of Brits spend 416 pounds each on lotteries every year. With the odds of winning being one in fourteen million, it is mind-boggling how so many people still buy a lottery ticket or a scratch card.

To answer the question, we have listed some of the reasons why people tend to invest in this industry despite their overwhelming odds of losing.

The ‘Near Miss Effect’

A Near Miss effect is one of the most common reasons why people buy a lottery ticket for the second time. It simply states that you feel you were too close to winning, and that is why you need to try your luck again. This effect is so drastic and so powerful that you have already bought a lottery ticket several times before understanding what you have fallen prey to.

Failure of Comprehension

For the most part of human history, we were not required to solve complex probabilities. This is another reason why our brains fail to comprehend the weight of probability, “one in fourteen million”. Research tells us that most people think of such probabilities as ‘1 in 100,000’, the odds of which don’t sound as bad. It is only when we ponder on it that we realise how bad our actual odds of winning are.

Availability Bias

This is when we overestimate the likelihood of a certain event based on our confined range of experiences. In other words, people do not think about the millions who have lost the lottery. Instead, they hear of one or two of the people in their circle who have won it, and take the entire decision thinking about them. This phenomenon is called the Availability Bias.

The High-Return

Another key reason why most people tend to waste their money playing the lottery is that they only think of the extremely low investment as opposed to the enormous return they could get for it. While it is fair to bet on your luck, you shouldn’t ignore the probability of your win—which is extremely low. In fact, investing that money in a savings account gives you a far higher chance of earning a profit than a lottery does.

Before you invest your money in buying a lottery ticket and putting your money on a stake that is likely to provide no good, take into account the possibilities of other investments in the financial market. With this many financial institutions in the United Kingdom, you are bound to get a good yield off your investment.