I'm one whose behavoir aligns pretty well with the article. I start playing the lotto when the jackpot gets north of $150 million. Statistically and historically it's wasted money, but I can blow $10 here or there without much consequence. If I saved and invested all the money I wasted on powerball, I'd have maybe $1,000-2,000- not a life changing amount of money for me.
As I type this, a thought occurs to me- maybe I should double my lotto expenditures- every time I buy lotto tickets I deposit the same amount of money into a mutual fund of some sort- see where I'm at in another 10 years.
Anyway, the interesting thing about lotto economics is not middle class and higher people who use modest discretionary funds for a shot at the big jackpot. It's that lotto sales are highest in the lowest income communities- people with less money to waste, for whom $10 is a more significant part of their paycheck. The lotteries are funded largely by people with the least money to spare.
Now it's likely that in the absence of state driven gambling, illegal gambling would arise (or grow bigger), possibly with even worse consequences for the least well off among us. That's a significant factor in the moral case for or against state-sanctioned lotteries. There are some states without lottos- Hawaii, Alaska, Utah, Mississippi and Alabama- so there ought to be some information about this factor. A quick google search yields some leads, which I do not currently have the time to digest.