I have recently read an interesting essay on this topic, but it was already explained it to me a few years ago.
The thesis would consist that, although the probability of winning classical lotteries is near zero (typically between 0.0000007% in the case of Euromillions and 0.000003% in the case of national lotteries), people is willing to pay an excessive overprice because they are buying the right to dream about the possibility of winning.
Although there are extreme cases that get addicted to lotteries, this is quite uncommon if I'm not wrong, because, if you are not paying for the probability but for the possibility, a bet of 1 USD is enough to buy said possibility.
On the other hand, national lotteries are known to be "taxes on ignorance of mathematics", but if these revenues financed public expenses that revert to the common good: would you agree to pay systematically 1 USD more in your annual taxes as something that ensures the right to dream of a dear life of every taxpayer?
I think you have outlined a very interesting thought-provoking approach to lotteries here. Buying the possibility instead of the probability. I would have to think a bit more about it, but what came immediately to my mind was the question for evidence that poor people play the lottery more than the rich people.
"
Why do the poor spend more on lottery tickets than their wealthier and better educated peers?"
Since states know this,
these guys argue that "In our opinion, states should not be in the business of extracting wealth from poor people..."
and I think they are right. The good part is that since more poor people play the lottery, the probability that a poor person becomes rich is high. The bad part is, the certainty that there is a redistribution of wealth from low-income households to
higher income households due to the fees and taxes raised on lottery stakes and winnings (depending on where you live/play). I didn't say high income, but higher income as there is a negative correlation gradually increasing between household income and amount spent on lottery tickets.
People who are poor don't neglect mathematics because they are also stupid. But intuitively it makes more sense for them to cling to any possibility that can be maintained with the lowest resources possible. It still doesn't make sense because the money spent could probably change their lives in more impactful ways if smartly saved over a long period of time, but time is also a discount factor for their subjective perception. Telling someone who is poor to save for 40 years to change the situation doesn't sound quite appealing.
The possibility to finally be able to pay all the bills forever on time and afford luxury items that are otherwise impossible forever, outweighs any rational approach to statistics. It is similar to mental accounting, which is more of a psychological thing and not the absence of mathematical skills.