Lotteries are rational when you consider the entertainment value. Most lottery players dont expect to win, but as long as theres the possibility it allows them to daydream about what they would do if they did.
Most players are fully aware of this, just as most beer-drinkers drink in moderation. (See Brenner, Brenner & Brown for more data.)
Rich people can go to tennis matches, get a pilot's licence, and buy stock options. Poor people have much fewer alternatives.