These 5 States Don't Sell Lottery Tickets -- and That's a Good Thing

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  • Alabama, Alaska, Hawaii, Nevada, and Utah do not sell lottery tickets.
  • While playing the lottery might seem like a savvy financial move, the opposite is actually true.

Gambling away your money could hinder your long-term goals.

Inflation has made life exceedingly more expensive and difficult for consumers over the past 18 months. And at this point, a lot of people are desperate for a windfall, whether in the form of a stimulus check from the government or another type of surprise payday.

For some people, the desire to get their hands on extra money has pushed them to play the lottery this year. But that's basically akin to throwing money away.

Unfortunately, the temptation to play the lottery can be huge, as most states not only offer a lottery, but advertise it persistently. In fact, in 2019, lottery sales surpassed $91 billion, according to the North American Association of State and Provincial Lotteries. But there are five states that don't sell lottery tickets -- and for good reasons.

Not a countrywide practice

There are five states that do not sell lottery tickets: Alabama, Alaska, Hawaii, Nevada, and Utah. And they have their reasons.

Alabama and Utah prohibit gambling in their state constitutions, and religious groups in these states have long blocked efforts to legalize casinos or start offering lotteries. And in Nevada, the ban on lottery tickets boils down to the casino industry wanting to minimize its competition.

But there's another reason some states have hesitated to adopt lottery ticket sales. It's often the case that lower-income households spend a disproportionate share of their income on lottery tickets compared to higher earners. That's hardly a healthy pattern, so it's easy to see why some states would want to go out of their way to discourage that behavior.

Why it pays to avoid the lottery

At first, the idea of playing the lottery can be tempting. After all, for just a few dollars, you have the potential to come away a millionaire. Talk about a good investment.

But one thing you should realize is that your chances of winning the lottery are abysmally small. You're more likely to get hit by lightning than to end up with a string of winning numbers. So rather than waste money on lottery tickets, you're better off doing what you can to save and invest the limited funds you have.

In fact, if you want to turn a small amount of money into a whopping sum, investing it in an IRA or brokerage account is a good bet. For example, if you were to invest $1,000 over 50 years at an average yearly 8% return (which is below the stock market's average), you'd end up with roughly $47,000.

That's not the same as spending $5 on a lottery ticket and walking away a millionaire. But it's a pretty good deal nonetheless.

Also, when you invest your money, the odds of earning a solid return aren't slim. Quite the contrary -- they're pretty high. So the next time you're tempted to take $5 or $10 and put it into a lottery ticket, consider putting it into your IRA or brokerage account instead. You're likely to end up much happier with the results.

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