Lottery Maths

[econ_tim 0]

i remember some old threads asking whether the lottery is ever +EV.here is a page with a good, but complicated answer http://www.stat.umn.edu/~charlie/lottery/

[HoosierAlum 0]

Even in huge jackpots, its still -EV. But meh if the jackpot gets huge I will throw down a couple bucks on essentially a couple hundred million dollar freeroll.

[FatBurger 0]

But meh if the jackpot gets huge I will throw down a couple bucks on essentially a couple hundred million dollar freeroll.

Did they change the definition of freeroll?

About half of every dollar bet goes to prizes. The other half goes to overhead (administration and advertising) and to the state governments.

And I thought 97% payout slots was a bad idea.

[HoosierAlum 0]

Did they change the definition of freeroll?

Eh, $1 or $2 is close enough.

[hblask 1]

i remember some old threads asking whether the lottery is ever +EV.here is a page with a good, but complicated answer http://www.stat.umn.edu/~charlie/lottery/

I saw a different article about it once where they concluded that it can sometimes technically be +EV (after taxes and split pots) if the prize pool gets big enough, I seem to remember it was about 2.5 times greater than your odds (so if your lotto is 1 in 100,000,000 you would need a prize of 250,000,000). They then invoked some other statistical theory to say you are still throwing away money because your odds are so small that EV is relatively meaningless in this case because you'd have to play for thousands of years to even get enough attempts for EV to have any relevance at all. This other law of large numbers outranked simple EV calculations.On the other hand, a team of well-financed statisticians once computed how large the lottery would have to be to make it worth it to just buy every combination. I think they tried it with the Australian lottery (?), although my memory is foggy at this point. Their theory was correct, but it turns out that it is basically physically impossible to buy that many tickets in the required time without mistakes. They ended up only covering about 60% of the numbers, but were lucky enough to hit for a huge win.

[champsox 0]

Eh, $1 or $2 is close enough.

OT: Nice job in the HORSE last night. Too bad its still not a great prize pool. Maybe after the 50k event at the WSOP, the game will grow in popularity.

[....Ian.... 0]

2 things that no one brings up1. the pool ROLLSOVER so the drawings contribution (divided by 2) is 90% exceeded. so you're wagering $1 on UN-WON $ not just that week's wagers2. Taxes have a significant effect on whether it is +EV or -EV

[FourFlusher 0]

If you're going to play, buy at least two of the same ticket. That way if you have to split with some body else, you get two thirds. Two others you get half.

[joeythep 0]

If you're going to play, buy at least two of the same ticket. That way if you have to split with some body else, you get two thirds. Two others you get half.

The problem with that is, that you are actually cutting down your risk/reward ration. Say you spend $1 and win half of a $10 mil jackpot, thats a 5million to 1 payout. If you spend $2 to win 2/3 of that jackpot, it's $3,333,333.33 to 1 pay out. You've actually reduced the payout ratio by one third.

[Gibbo 0]

Its 5:39am and I cant beleive I read all of that.

[QWithATray 0]

The numbers are all based on "the reporter who talked to one of us said the lottery expects to sell 80 million tickets this week"...it doesn't get into how the number of tickets sold grows as the jackpot grows which is what you need to understand to be able to evaluate this, not some guess from a reporter!

[golfanatic21 0]

im still partial to the scratchers. Whenever i go to the grocery store and pay cash all the singles go into the scratcher machine. if i buy a soda it ends up costing me $5. I think im gonna check myself into GA. SW

[ricker 0]

I buy a few lotto tickets every so often. It's just a donation...but if I ever win, I'll throw a $10,000 freeroll for FCP players