Misleading Lottery Ads

Recently, Powerball started airing a new lottery advertisement which selling point is that for one dollar you could win fifteen million. In the ad, a few armed security guards take the Powerball jackpot into a store, and then ordinary shoppers' reactions are filmed with a hidden camera. While I doubt that the shoppers were just passersby and not paid actors, and the security guards are too relaxed to actually be guarding fifteen million in a public place, that is not my problem with the ad. My problem with the ad is its catchphrase.

"Now only one dollar---Fifteen Million Dollars," the sign next to the money says.

That claim is a lie. Some advertising genius has taken false claims to a whole new level and is misleading people who have better things to do with their money than buy lottery tickets.

Now, let's be honest: All advertising is misleading, including lottery ads. Commercials for the lottery show happy winners and the benefits of having state sponsored gambling (in Colorado, the ads show happy bicyclists and hikers enjoying colorful wilderness). The ads are supposed to make you believe that you will be happier if you win the lottery. They are also designed to soothe your conscience when you lose by telling you that the money is still benefiting you.

The happy little cynic that I am says that lotteries are a tax on the American Dream. The government has figured out a way to tax our hopes and dreams. If you pay a lottery ticket saying "Maybe I won't have to go to that miserable job tomorrow," the government has just taxed you for believing that it could happen.

That fifteen million dollars and that little sign saying "Now Only One Dollar" is an attempt to get you to give money to your state government. It is a hidden tax. The advertising genius behind that ad does not want you to remember that, so he lies though omission.

That is not his only lie. He is also lying to you about the actual cost of that fifteen million. First off, you are not going to get the whole fifteen million. Uncle Sam will have his hand out for his share, as will the state if you live in a state with income tax. There is also the troubling issue with inflation; money won today, but paid tomorrow is worth less. That fifteen million is not fifteen million; you will get far less than that.

Plus, it is going to cost you more than a dollar.

Let's ignore the opportunity cost of that dollar (what else you could have done with that dollar) and just focus on this one Powerball ticket. To win the jackpot, you have to correctly match all five numbers and the Powerball. The odds that you are going to do that are 1 in 147 million. You have better odds of making big money playing the stock market or starting your own business than you do of winning the lottery jackpot. And that is even if you chose to play just the ordinary state lottery with its smaller jackpot and better odds (in Colorado, the odds are 1 in 5.3 million for the regular state lottery).

The advertising genius is not going to tell you that either, but that is not the worst thing that they have done in this ad.

"Only one dollar..."

A Powerball ticket costing one dollar can not win the jackpot; you have to use the Powerplay option to have a chance at winning the jackpot. The most that you can win with just a dollar, having matched five numbers, is two hundred thousand. That is far short of the fifteen million that the ad says can be had for just one dollar.

It is a just little lie.

I must hand it to the Multi-State Lottery Association, "a non-profit, government-benefit association," which runs the Powerball in twenty-nine states, plus the District of Columbia and the US Virgin Islands. I almost didn't spot the little lie. And I was watching for it. They almost got it past me.

I used to play the state lottery here in Colorado---every drawing, every week. I would buy my tickets saying that maybe I would not have to go into that horrible job tomorrow. Maybe, just maybe, I would get lucky this time. One day I realized how much money I was flushing down the toilet, and I quit playing the game.

So how much money does Powerball cost a year? Once again ignoring opportunity costs, buying a ticket with the Powerplay option costs two dollars, and there are two drawings a week. That comes out to two hundred and eight dollars a year. Just to have a chance that maybe you will be kissed by Lady Fortune.

What can you do with two hundred and eight dollars a year? I bet that you can come up with something better than falling victim to a misleading ad campaign. I know that I can.