> The continued existence of lotteries is proof that most people don't know how to handle money.

In studies I have seen most of the money made from lotteries is from a small portion of population (3% of population pays about half the money, 7% pays an additional 30% of money; remaining 20% of money comes from 40% of population)

So lotteries probably don't tell us much about how most people handle their money. (Only about a particularly susceptible subset of people.)

The motivation for buying tickets, and impact of lotteries may be better understood by considering different populations. Lotteries probably have the most impact on those who play routinely, so understanding them is probably the most useful. (Those selling the lottery focus advertising in lower income and minority areas - populations which have higher rates of buying lottery tickets. They also design games to appeal to particular ethnic groups, like Asians. Similarly, some of them time advertising around when assistance payments come out.)