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The gambling craze continues unabated in the United States. The amount of money Americans spend on lottery tickets has increased every year since the first state lottery was introduced in 1965, even when economic recessions have led to decreased spending in other economic sectors. In 2014, Americans spent more money on lottery tickets than they spent on sports tickets, books, video games, movie tickets, and music combined. Americans spend even more money on casino gambling than on lottery tickets, and they spend more than twice as much money on illegal sports betting than on lottery tickets and casino gambling combined; more money is bet on football alone every year than is spent on either casino gambling or lottery tickets. And legal betting (on sports and many other things) is increasingly popular, as is fantasy sports gambling.

Many poor and middle-income people play the lottery because they believe it is the only hope they have of ever becoming rich. A 2010 study showed that American households with annual take-home incomes of less than $13,000 spent an average of 9 percent of their income on lottery tickets. Let’s do the math. Nine percent of $13,000 is $1,170/year, or $97.50/month. Using the government’s compound interest calculator, if that same money were saved and invested in the market for 40 years at a 7 percent rate of interest (the average rate of return from the market over time), it would be worth $250,000 (compounding the interest quarterly). After 50 years, it would be worth $520,000. Thus, it is not true that the only way a poor person could ever hope to become rich is to buy lottery tickets and hope for a big win. The few poor people who do actually win big usually spend their winnings quickly anyway, because they have not learned financial responsibility and discipline. If someone living in poverty had simply saved the (gross) money he spent on lottery tickets, he would have $520,000 in an investment account at the end of his working life (from ages 18 to 68). Most poor people could easily save more money by eliminating some wasteful spending; for example, the average smoker spends 14 percent of his income on cigarettes. Other big unnecessary expenditures include cable TV, smartphones, and alcoholic beverages. It is safe to assume that the majority of poor and middle-income Americans could save $200/month over 50 years; if that money were invested in the market it would be worth over $1,000,000 and a low-income person could retire a millionaire.

Powerball is one of the most popular lottery games, due to its huge jackpots. The odds of winning the Powerball jackpot are 1 in 292 million. Tickets cost either $2 or $3, depending on the options selected. Let’s say that someone who is intent on winning Powerball buys 10 tickets for $2 each every day, or 3,653 tickets every year. In order to have a better than 50 percent chance of winning the jackpot, that person would have to keep buying 10 tickets every day for 40,000 years! Obviously it is extremely unlikely that you will win the lottery in your lifetime, no matter how many tickets you buy. But if you consistently save and invest your money, the odds are extremely good that it will result in gaining a modest fortune. Saving is the wise choice.

Of course, there are other ways to become wealthy besides saving and investing. Many poor people have become wealthy by starting businesses, by creating and patenting inventions, or by achievements and promotions in their workplace. On the other hand, while hard work and inventiveness are admirable, I disagree with the philosophy promoted by many financial gurus that becoming rich should be one’s goal in life, and that people should only choose careers with lucrative incomes. The Bible is replete with warnings against the dangers of riches (Matt 19:23-24; Luke 6:24; James 1:9-11; 5:1-6), and it specifically warns against the love of money (Luke 16:13; 1 Tim 6:9-10) and trust in money (Prov 11:28; 23:5; 1 Tim 6:17-19). Yet if you want to give away your money, the right thing to do is to give it to the church or some other Christian cause, not to gamble it away. And we need to be wise stewards of the resources God has given us, including our financial resources. The Bible teaches that, as a general rule, people who make wise choices and work hard tend to accumulate wealth and enjoy financial stability (Prov 3:16; 8:18; 10:4; 14:24; 24:3-4), merely as a result of responsible living. Also, preparing for the future is a wise thing to do, and certainly it is a good idea in the modern world to save up money for the final years of one’s life. Buying lottery tickets will hurt your financial state, not help it.

For additional reasons why gambling is inadvisable, see this post.

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