The lottery is a popular way to try out your luck at winning large sums of money for a small investment. Some lotteries also dedicate a portion of ticket sales to charitable causes. While it can be a fun pastime, it is important to understand the risks and rewards involved before you play.

It’s no secret that winning the lottery is a long shot. But, what isn’t so obvious is the ugly underbelly of this fabled game that gives people false hope of a better life and lures them into buying tickets with their hard-earned cash.

In the past, lotteries were hailed as a painless source of government revenue that was contributed by citizens voluntarily spending their own money on a chance to win. But, while they do provide some benefits to the state and its residents, there is a significant cost as well. In fact, studies have shown that they have a regressive impact and can actually hurt lower-income residents in the same way as income taxes do.

But despite the high odds of winning, millions of people continue to purchase tickets every week. And, according to the Associated Press, in 2012 alone lottery sales reached $78 billion. So, why do so many people continue to spend their hard-earned dollars on a chance of becoming the next multimillionaire? According to Stephen Goldbart, author of “Affluence Intelligence” and co-director of the Money, Meaning & Choices Institute, there are two main reasons.