Do Lottery Tickets Make Good Gifts?

It is that time of year again when the various lottery commissions try to convince people that lottery tickets make a great gift. There are ads in the newspapers, on the internet, television and radio. The lottery commissions want you to buy your friends, relatives, and co-workers lottery tickets instead of searching for something more meaningful.

This trend has been going on for several years. In fact, the ads from this year's Colorado Lottery commission are reruns from a previous year's campaign.

The first lottery ad is a couple of reindeer flying through the air; reindeer that look remarkably like a couple of guys from the local pack and ship store. The flying reindeer are talking about what they got various people; the one got his wife a nice pair of earrings which she will love. Then they start talking about how difficult it is to shop for the boss (aka Santa Claus aka the Big Guy). At this point, a third reindeer flies into view holding a paw-ful of holiday scratch tickets, and he says that they are the boss' favorites. Upon him flying out of view, his co-workers call him a "red-noser."

The second Colorado lottery ad, a radio slot, has the voices of gift cards who have been "imprisoned" in the "drawer of unwanted gift cards." The newcomer insists that he is different, being from a fancy belt store. The other gift cards laugh.

Both ads want you to believe that people like to receive lottery tickets as gifts, that they make shopping for gifts easier, and that they are worth more than an unused gift card. And that you will feel pleasure, and not resentment, if you do buy and give away a ticket for a major prize.

The reality is vastly different. People look askew at lottery tickets as gifts, thinking that the giver could not be bothered to go beyond the local gas station or quickie mart. If you do buy one that is a big ticket prize, you will feel resentment that you gave it away. Don't worry; odds are that the unused gift card is actually more valuable.

The lottery commissions do not want you to consider that last part. They want you to believe that there is there is a chance that you are giving someone a ticket that is worth lots more than what you paid for it. The odds are actually that the ticket is not even worth what you paid for it.

Taking three lottery commissions at random and assuming that it is a scratch ticket, what are the odds that the lottery ticket will be just an useless piece of paper. The Colorado Lottery's $leigh Ride Riche$ has overall odds of 1 in 3.98; New Hampshire Lottery's Holiday Lucky Times 10 has overall odds of 1 in 4.35; and New York Lottery's Happy Holidays game has overall odds of 1 in 4.41. Averaging them out, one gets odds that are only 1 in 4.25.

In other words, there is only a 24 percent chance that the lottery ticket will even be worth what you paid for it. Three out of four tickets are merely trash. Buying more tickets will not make any difference, given the odds. Either will switching games, for most scratch games have this level of odds, and the drawing based games (Powerball, etc.) have even worse odds. So more often than not, if you give someone a lottery ticket as a gift, you have given them a worthless piece of paper. It would probably be better that you give them a gift card; at least it is guaranteed to be worth something if it is actually used before its expiration date.

Sources:

http://www.coloradolottery.com/

http://nhlottery.com/

http://www.nylottery.org/