Powerball Pot and Implied Odds

[wacki]

Just wondering with the Huge Powerball and Megamillion jackpots, how much does it take for people to buy a lotto ticket?

With powerball the odds are 1 in 120,526,770.0 of winning the Jackpot. Do you go by pot odds only? Or do you lower you expectations? If so how much are you willing to risk and at what level?

Right now I only buy lotto tickes once they reach 88 million. That number has sentimental value to me. I only buy $5 bucks at a time, but once the Jackpot increases to make pot odds favorable (> $120 million) I will buy $10 for each drawing. Not much, and I don't ever think I'll ever win, but I can't help but take atleast a small chance.



What do you do?

[ThaSaltCracka]

this is potentially a very stupid question because I have taken stats class, but.... if you bought a million tickets, do your odds now become 1 in 120ish?

[M2d]

with lotto, I don't give a rip about ev. i calculate the true amount I'd receive, after taxes. if that amount is more than I'd need to retire, i buy a couple of tickets. if not, I root for no one to win.

[wacki]

[ QUOTE ]
this is potentially a very stupid question because I have taken stats class, but.... if you bought a million tickets, do your odds now become 1 in 120ish?

[/ QUOTE ]

Yup, and organizations have done things like this before to earn money. not 1 in 120, but I remember seeing a company (on some TV program) that tried to buy all of the tickets and only made it to 80% of them. You should of seen all of the boxes they had.

[wacki]

[ QUOTE ]
with lotto, I don't give a rip about ev. i calculate the true amount I'd receive, after taxes. if that amount is more than I'd need to retire, i buy a couple of tickets. if not, I root for no one to win.

[/ QUOTE ]

Ya, I figure that is probably the best way to go about it. So my 88 million mark is probably to high. I don't think I'll change it anytime soon though.

[nef]

Your chance of winning is = 1 - (1 - 1/120526770)^1000000 if you could buy a block of 1 million different tickets.

[nef]

This is kind of like accounting for a non-linear utility of money and the benefits of early retirement in luxury or something. I never buy a lotto ticket because powerball or the big ones are not in my state and I'm too lazy.

[cardcounter0]

The jackpot has to be about 2x bigger than 120 million for it to be +EV because half is going to get immediately eaten up in taxes.

And to those that ignore EV, that explains why casinos still have roulette wheels.
/images/graemlins/grin.gif

[ThaSaltCracka]

Whats preventing a millionare or billionare from buying effectively 50% or more of the tickets and statistically speaking making a 50-50 bet on the lotto? That seems like it would, or should work out.

[cardcounter0]

Because it is possible that someone else would have a winning ticket also, causing a split pot, meaning it would be slightly less than 50/50 chance.

And then he would owe taxes on the win, so it wouldn't be 50/50 even if they won alone.

Most people with multi-million dollar bankrolls are more concerned with preserving captial rather than pissing half of it away. Usually they didn't get the multi-millions by taking great risks with -EV payoffs.

[ThaSaltCracka]

ah, I forgot about the split....yeah that makes sense.

[wayabvpar]

RoR is too high on that one =)

I generally buy a few Megamillions tickets when it gets over 100 million. It is worth $5 to get to daydream about winning for a few days /images/graemlins/grin.gif

[wacki]

[ QUOTE ]
It is worth $5 to get to daydream about winning for a few days /images/graemlins/grin.gif

[/ QUOTE ]

I never thought about it that way, it is worth the $5 even if you don't win!

[ThaSaltCracka]

RoR?
Is that Return of ......?

I should really start buying lottery tickets. I have so many better things to do with my young life than work and school.

[astroglide]

It is worth $5 to get to daydream about winning for a few days

i would never fault somebody for buying a lottery ticket, for that reason. if they don't it's dumb though. just like how i can understand people who enjoy smoking cigarettes, but don't understand unknowing chain smoking.

[cnfuzzd]

so youre ok with people who enjoy chain smoking, right? I just want to make sure, in case we ever meet. Especially if you live in my state. which at one point i heard. Now i am rambling.

peace

john nickle

[astroglide]

i "get it" a lot better if they actually enjoy what they're doing. if they don't, they've just added one more thing to their day that they have to do or that will make them unhappy if they don't.

[andyfox]

There you go. EV means nothing when you're getting 88,000,000 to 1 when the odds are 87,999,999 to 1. The long run is just too long.