Your chances of winning do increase, however, the increase in the probability of winning is more than offset by a reduction in the return that comes from holding a winning lottery ticket.
Look at it this way, if you hold every lottery ticket, you're assured to win, however, the return is negative. So the worst possible option is to buy all the tickets. As you decrease the amount of tickets bought, you increase the return more than you decrease the probability of winning (this is because the total amount to be won is smaller than the combined value of all the tickets - if they were the same it would not matter how many you bought, you'd have the same chance regardless).
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Also interesting is that the odds of winning power ball are like 1 in 180,000,000. Sometimes, the jackpot can be bigger than this (without taxes) in which case the lottery differs from the one Mises describes.