This Is How Much Americans Spend on Lottery Tickets

With inflation still elevated, it's natural for people to look for an easy way to ease some of the financial pain. And focusing on finding a quick fix for your personal finances is understandable.

After all, home prices have increased nearly 30% since 2020, car prices are up, and last year consumers experienced the largest annual increase in food prices since the 1980s, according to the U.S. Government Accountability Office. Even car insurance prices have skyrocketed recently.

Looking for a little financial relief has led many Americans to spend more on lottery tickets. But spending your hard-earned money on the lotto is almost always a losing battle, despite the promised potential of a huge payout.

Lottery ticket sales are on the rise

Spending on lottery tickets is up 20% from 2020, and ticket sales have topped $100 billion in each of the past two years. And last year, state lottery ticket sales reached an all-time high of nearly $108 billion, according to the North American Association of State and Provincial Lotteries (NASPL).

And if we look back over the past decade, it becomes even more apparent that Americans are comfortable spending an increasing amount on lottery tickets. Ticket sales were just $68.8 billion in 2012, compared with $108 billion last year, a massive 57% increase over 10 years.

Out of the 45 states that have lotteries, Florida sold the most tickets, with $9.3 billion in sales -- followed by California, with $8.9 billion in sales last year, according to NASPL.

In addition to rising inflation, another draw to lottery tickets may come from the size of some recent prizes. The largest single-ticket winning prize of $2 billion was awarded from the Powerball lotto just last year.

Those large jackpots do a good job of enticing more people to buy tickets, but the chances of winning are constantly working against you.

How to realistically turn a little money into a lot

Occasionally spending a few dollars on a lottery ticket certainly isn't going to break the bank. Many people only buy tickets when the jackpot reaches astronomical highs, which almost always doesn't work out well for them because the chances of winning the largest jackpots are far lower than games with smaller payouts.

The chances of winning the Powerball jackpot is 1 in 292 million. A mathematics professor recently told the Associated Press that if someone bought a Powerball ticket three times a week for 80 years, they'd still be far more likely to get struck by lightning than to win the large payout.

But it's not just that the odds are stacked against you. It's also that when you spend that money on lottery tickets, you're taking it away from investment opportunities that have far better chances of making you money.

Let's say you spent $20 per month on lottery tickets over 30 years (totaling $7,200). If you opened a brokerage account and put $20 every month toward an index fund that tracked the S&P 500, you might earn a historical average rate of return of 8% per year -- giving you $27,400 at the end of the 30 years.

That's not an eye-watering amount of money compared to lottery jackpots, but it is far more realistic and achievable than hitting it big in the lotto. Sure, a few dollars here and there probably won't derail your personal finances. Just make sure you're putting far more effort -- and money -- into a real investment plan.