I suspect that many of the people who play the lottery don't view money as having a strictly linear value. Spending a dollar a day on lottery tickets is a cost that is easy to absorb (think of how many people think nothing of buying a cup of coffee from Starbucks every day). Winning the lottery means getting a relatively large infusion of cash at once, at that infusion has a higher value to power people than the loss of a small amount of money.
Put another way, as a one-time deal, would you consider spending $1 for a 1-in-a-million chance to win $100,000? For many people, that isn't a totally unreasonable bargain. But if I ask you that 10,000 times, the cost becomes spending $10,000 for a 1-in-100 chance to win $100,000. That's the real problem with the predatory nature of the lottery.
Put another way, as a one-time deal, would you consider spending $1 for a 1-in-a-million chance to win $100,000? For many people, that isn't a totally unreasonable bargain. But if I ask you that 10,000 times, the cost becomes spending $10,000 for a 1-in-100 chance to win $100,000. That's the real problem with the predatory nature of the lottery.