The Pros and Cons of Lottery Marketing

A lottery is a game in which participants pay a small amount of money for a chance to win a large prize, usually money. In the United States, state governments sponsor lotteries. In many cases, a percentage of proceeds go toward education, while smaller amounts may be used for administrative costs or for other purposes, including marketing. Lotteries are widely popular and have become a major source of revenue for state governments, with more than half the states now offering one.

Buying a lottery ticket involves a trade-off between expected gains and perceived entertainment value. As a result, it’s unlikely that anyone would purchase tickets if they were making the decision solely based on expected utility maximization. Nevertheless, many people buy lottery tickets, either because they don’t understand the mathematics, or because they find the thrill and fantasy of becoming wealthy to be worth the cost.

Lottery marketing campaigns expertly capitalize on a sense of FOMO, or fear of missing out, says Adam Ortman, president and founder of Kinetic319, an advertising agency in Denver. The media bombardment of big jackpots, and narratives of previous winners enjoying newfound wealth and happiness, create a compelling message that makes winning seem both attainable and life-changing.

But there are also critics. Lotteries are alleged to promote addictive gambling behavior, and they’re often seen as a major regressive tax on lower-income groups. They’re also criticized for diverting funds that could be spent on education or other public services, and for creating a conflict between state interests in increasing revenues and its responsibility to protect the welfare of its citizens.