Lotteries Dissolve Brain Molecules

Haven't most of the ultra wealthy already experienced this entrepreneurial thrill several times over? Maybe they are looking for some different thrills.

 

Shouldn't that be 63%, or approximately (1 - exp(-1)) when the number of players equals the number of possible combinations? (Assuming random picks only, without the usual selection biases of common lucky numbers.)

 

Expected value = sum of all the events times their probabilities.

If the odds are 1:200,000,000 and the jackpot is 200,000,000 and you buy the only ticket for $1 your expected value is $1.
(200,000,000 * 0.000000005 + 0 * 0.999999995) = 1

It gets a little more complicated with others also betting. Not only do the odds of sharing the prize increase, but each of those other players is increasing the value of the jackpot.

Buying every ticket (almost) has been done. They consortium that did it made significant money.

p.s. This is probability NOT statistics.

 

I am aware that some people say gambling is "entertainment." I don't understand it. But like you say, Different strokes for different folks.

I've played penny-ante and nickel-ante poker with friends. It's not really poker in the truest sense, because poker is a bluffing game, and when you can call for 25 cents, nobody can bluff. The enjoyment, such as it is, is sitting around with friends, drinking a ginger beer, and chatting, and (in my case) trying to figure out the oddball games the dealers call.

But I'd rather sit with the same guys not playing cards. And in Vegas, even that social interaction is absent.

I think once in my life I spoke with a habitual "entertainment" gambler who admitted that over the long term, he loses far more than he wins. Everyone else I talk to claims that he's so sensible in his gambling that he wins more than he loses.

Either the casinos are losing money, or some of these folks are giving me inaccurate reports.

Clearly, many of the people who gamble must be aware that they will lose in the long run, so there must be some other kind of pleasure they get out of it. Maybe it really is entertaining for some folks. I have a blackjack program on the iTouch, and back in the day I had a very nice poker program I wrote myself. I got all the entertainment without losing any money.

And I think we all know that some (many???) people gamble in the genuine hope of winning money. The lottery ads all say "It's fun to play." But we know that most lottery tickets are sold to people who buy them because they want to win money, not because its "fun" to "play." And buying a lottery ticket is not "playing." You play baseball. You play chess. Buying a lottery ticket is just gambling. And it's got worse odds than many other forms of gambling, but it's popular because the jackpots are so big.

It baffles me.

 

I don't gamble. I invest.

 

The Expected Value of a ticket also must be corrected for Present Value and for taxes. An $X million jackpot in the U.S. is always the sum of all payments of an annuity spread over 20 or more years. Its Present Value is always substantially lower.

In a previous discussion, it seemed that common lottery advertisements in the U.S. would be considered fraudulent advertising in U.K.

Even if it were possible to have purchased all numbers in this jackpot, other ticket sales were already pushing the likely number of winners to nearly 4. So the expected ticket value never reached breakeven, even when including the $0.182 value of the smaller prizes.

 

I'm not a gambler but I'll play a lottery ticket without fear because it's only a buck. Over a year, I'm spending $104 on lottery tickets. No big deal. I do like to play a little Texas Hold 'em over at http://www.nlop.com where it is free to play and you can win. I usually receive a small check each month, $5, $25 or even a $500 once.

 

According to the megamillions web page, the stated value of the pot is the amount you get (before taxes) if you are the sole jackpot winner. If you select the annuity instead, you get slightly more in actual dollars, but of course inflation will be active during the period, so it looks to me like the annuity is a poor deal, unless you don't trust yourself with the full amount at once, or your tax situation is such that the annuity involves less taxes (though you can never know how the tax laws will change going forward.)

But they pay out the entire pot amount if there's a winner.

Some other lotteries do not work that way. I believe the Publisher's Clearinghouse sweepstakes pays less than the stated amount if you take the full payment, and only pays the full stated prize if you take the annuity.

I agree with the rest of what you say, especially the reduction in so-called "value" due to the likelihood of multiple winners at every level.

I will also say that in my view, the ticket has no actual value until and unless it wins a prize. Odds of winning times prize amount only gives an average value of all tickets. Like Schrodinger's Cat, the ticket has no value until the experiment is performed.

 

Where on the Mega Millions web page did you read that? It conflicts with what I see. And note that the next drawing, April 3, is advertised as having a $12M jackpot, but only an $8M cash option. Here are the relevant portions of the MM pages:

11. What are the payout options?
If you are a Mega Millions jackpot winner, you will have the choice of a Cash Option or an Annual Payout. Annuity option: Provides annual payments over a 26-year period. For every $1,000,000 in the jackpot, you will receive approximately $38,500 per year before taxes. Cash option: A one-time, lump-sum payment that is equal to all the cash in the Mega Millions jackpot prize pool.

Difference Between Cash Value and Annuity

If you win a Mega Millions jackpot, you will choose how to be paid: Cash Option or Annual Payout. Prize claim parameters vary from state to state. Contact your Mega Millions lottery for detailed information.
Annuity option: Provides annual payments over a 26-year period.
Cash option: A one-time, lump-sum payment that is equal to the cash in the Mega Millions jackpot prize pool.
Choose how you want to receive your jackpot prize:

Advertised Jackpot _ Annual Payout _ Approx. Cash Value
$12 million _ $461,538/year _ $7,042,000
$25 million _ $961,538/year _ $14,670,000
$60 million _ $2,307,692/year _ $35,210,000
$137 million _ $5,269,231/year _ $80,396,000
$270 million _ $10,384,615/year _ $158,445,000
$331 million _ $12,730,769/year _ $194,242,000

NOTE: The cash value amounts above are estimates, subject to market and/or interest rate fluctuations.

 

I've been running my own lottery for years. Doing pretty good, too

Wanna play? Come over here. Shhh. Just come over to the alley here, out of the street.

Y'know this is illegal - I'm not a state government, I'm just a guy. But I'm offering a great deal! I don't have overhead like the state - I give you back more money than they do. Maybe that's why it's illegal - they can't take the competition from guys like me!

What's the catch? No catch! I'm giving you a better deal. Really! Guaranteed!

Quick -duck a little bit farther back - I think that cop was watching us. That's better.
OK! Let's play my lottery now! Gimme a dollar.

Thanks. Here's fifty cents. Shiny new quarters, too! Wanna play again?

Hey-come back!​

 

I propose a new game:

The gambler is put in front of a TV and chooses some crappy show or another. Really, any channel will do. At the end of the hour (45 minutes show and 15 minutes adverts,) the gambler throws a couple of dice, the result determining how much the show cost. Some win and only pay a dollar, most pay about $10, and the unlucky ones pay $25.

Play as much as you want, kill a few hours with entertainment at its best !

 

The portion that I have put in bold is what I based my statement on.

 

Note that that figure is not the advertised jackpot. It is smaller, and will be used to buy an annuity with payouts totaling to the advertised jackpot.

Note the bottom portion quoted in my post, where the "Approx. Cash Value" is uniformly less than the "Advertised Jackpot". This is before tax withholding.

Or just look in the upper left corner of either linked Mega Millions web page, and note that the "Cash Option" is smaller than the "Estimated Jackpot".

 

^ I stand corrected. Thanks. Their wording had me fooled. (Not fooled enough to buy a ticket, though!)

 

i have a winning lottery ticket!!!!!!!!


but it's lost


can i get 12 billion?

 

^ Nope. Lottery tickets are bearer instruments. Whoever walks in with the ticket gets the prize.

 

He's referring to this hilarious story.

 

However if the ticket bears your signature only you can claim it. So the person who found it would need to get with you and work out a mutually satisfactory reward.


iPad ?