Is playing PowerBall currently +EV???
 

At a $1 ticket, approx 1:140million odds of winning, and a $340 million grand prize it seems like it should be. Am I missing something here because I dont really think it is...

Heres the odds of winning:

http://powerball.com/powerball/pb_prizes.asp

Re: Is playing PowerBall currently +EV???
 

Yap. You are missing Federal, State, and Local taxes. You are also missing the fact that you don't get $340 million. You get a twenty year annuity with a present value that is worth far less, or a big discounted lump sum (minus the previously mentioned Federal, State, and Local taxes). You are also not factoring in the small chance of someone else winning and splitting the prize.

Re: Is playing PowerBall currently +EV???
 

It's not +EV, but you should play anyway because you want to.

Re: Is playing PowerBall currently +EV???
 

Current Jackpot:

$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev???

F it im playing but I still wanna know the answer.

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev??? F it im playing but I still wanna know the answer.


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You're playing with tax free dollars, calculate your winning in tax free dollars. 164.4MM * .6 = 98.64MM if you're the only winner.

Re: Is playing PowerBall currently +EV???
 

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F it im playing but I still wanna know the answer.

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Yeah, I knew that, which is why I wrote my post the way I did. [img]/images/graemlins/smile.gif[/img]

It's still significantly -EV because of (1) taxes and (2) the nontrivial chance of splitting the top prize even if you win. cardcounter0 explained this already.

Re: Is playing PowerBall currently +EV???
 

$ 164.4 Million Cash Value - Federal Taxes = $ 117 Million Cash Value
Now subtract State Taxes. Then subtract Local Taxes.

I would buy 7 tickets, because 7 is a lucky number.

Re: Is playing PowerBall currently +EV???
 

In addition to what everyone else said, the chance that you split the prize is pretty big too. This was mentioned once, but I thought I'd note that it lowers the EV immensely.

Re: Is playing PowerBall currently +EV???
 

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In addition to what everyone else said, the chance that you split the prize is pretty big too. This was mentioned once, but I thought I'd note that it lowers the EV immensely.

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This is interesting. Ive never heard of the powerball prize being split before.

At least I understand now how its -ev, thanks for the help.

Re: Is playing PowerBall currently +EV???
 

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I would buy 7 tickets, because 7 is a lucky number.

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Now, there's a strategy we can all get our arms around.

[img]/images/graemlins/wink.gif[/img]

Re: Is playing PowerBall currently +EV???
 

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It's not +EV, but you should play anyway because you want to.

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Guys...who gives a rats ass if it's a -EV. It's a HUGE pot that doesn't happen very often and to think of this as either a -EV or not is sense less. If you play and hit it even if you split the pot who cares, your going to be rich as hell and won't need to grind out any game you gamble at anymore.

Re: Is playing PowerBall currently +EV???
 

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Who gives a rats ass if it's a -EV. It's a HUGE pot that doesn't happen very often and to think of this as either a -EV or not is sense less.

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Play every hand as if you had to do it a million times.

Re: Is playing PowerBall currently +EV???
 

I've heard discussions of this in the past, and you need to factor in that there are prizes for getting some of the numbers right too, not just for getting the jackpot...

I'm sure this swings the EV, but I'm way too lazy to do the math.


But, honestly... there is no reason to assume it's -ev just because it's the lottery. The party bbj has gotten to +ev before and I assume powerball has and can too.

Re: Is playing PowerBall currently +EV???
 

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Who gives a rats ass if it's a -EV. It's a HUGE pot that doesn't happen very often and to think of this as either a -EV or not is sense less.

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Play every hand as if you had to do it a million times.

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Were talking the odds of Power Ball of 1 in 140 Million. If you averaged 250K hands of poker/ year then it would take you 560 years to make this -EV happen. Even then it would only be a sample of 1...LOL

Re: Is playing PowerBall currently +EV???
 

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Were talking the odds of Power Ball of 1 in 140 Million. If you averaged 250K hands of poker/ year then it would take you 560 years to make this -EV happen.

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Well, if you're in a rush you could just buy all 140MM combinations. Then you could make it -EV right away.

Re: Is playing PowerBall currently +EV???
 

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Were talking the odds of Power Ball of 1 in 140 Million. If you averaged 250K hands of poker/ year then it would take you 560 years to make this -EV happen.

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Well, if you're in a rush you could just buy all 140MM combinations. Then you could make it -EV right away.

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LOVE IT!

Re: Is playing PowerBall currently +EV???
 

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Guys...who gives a rats ass if it's a -EV.

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This is exactly wrong. Who gives a rats ass if it's +EV? When EV is dominated by a 8-digit jackpot, and your bankroll is not 8 digits, EV is a pretty irrelevant number.

Re: Is playing PowerBall currently +EV???
 

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8-digit jackpot ...

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This isn't worth discussing if it's only 8.

Re: Is playing PowerBall currently +EV???
 

The UK lottery sometimes pushes into +EV. Someone said to me the other day "A statistician worked out that the lottery is +EV this week, and that if you take advantage of every +EV lottery opportunity, you would on average die eight times in a car crash before you win".

The variance on these types of +EV gamble is way too big for us mere mortals to use as some sort of advantage proposition. If you were a Californian Redwood with a huge bankroll, on the other hand.....

Re: Is playing PowerBall currently +EV???
 

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The UK lottery sometimes pushes into +EV. Someone said to me the other day "A statistician worked out that the lottery is +EV this week, and that if you take advantage of every +EV lottery opportunity, you would on average die eight times in a car crash before you win".

The variance on these types of +EV gamble is way too big for us mere mortals to use as some sort of advantage proposition. If you were a Californian Redwood with a huge bankroll, on the other hand.....

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So, if you had a sufficiently large bankroll, with sufficiently high table limits, you could play a Martingale because "Who cares, I'll probably die before I bust anyways"?

Re: Is playing PowerBall currently +EV???
 

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a sufficiently large bankroll, with sufficiently high table limits, you could play a Martingale because "Who cares, I'll probably die before I bust anyways"?

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If I have a sufficiently large bankroll for this purpose I have better things to be doing than using it to grind out a few dollars an hour using the Martingale system because I'll die before I'll bust!

Re: Is playing PowerBall currently +EV???
 

I guess so...

Not as stupid as it sounds. *If* the limits were so high that you only had a 0.00000000000001% lifetime chance of busting then why not? On the other hand, I could think of better things to do with a quadromiliodduplexokabillion dollars.

Re: Is playing PowerBall currently +EV???
 

Keep in mind for your EV calculations that if you have made money gambling this year, that your losing Powerball tickets can be deducted from those wins for tax purposes. Just be sure to keep the receipts!

It's still -EV because of the chance of splitting the jackpot. I bought 5 tickets, because I had an extra $5 bill and you can get 5 sets of numbers on one sheet.

Re: Is playing PowerBall currently +EV???
 

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I had an extra $5 bill.

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I've never really understood that.

I've never had an extra $5 bill -- what do they look like?

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
[ QUOTE ]
$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev??? F it im playing but I still wanna know the answer.


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You're playing with tax free dollars, calculate your winning in tax free dollars. 164.4MM * .6 = 98.64MM if you're the only winner.

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prize/ after 40% tax/ odds/ EV
$164,400,000 $98,640,000 1 in 146,107,962 $0.675
$200,000 $120,000 1 in 3,563,609 $0.034
$10,000 $6,000 1 in 584,432 $0.010
$100 $100 1 in 14,254 $0.007
$100 $100 1 in 11,927 $0.008
$7 $7 1 in 291 $0.024
$7 $7 1 in 745 $0.009
$4 $4 1 in 127 $0.032
$3 $3 1 in 69 $0.044

total EV===> $0.843

There is a bonus for second place winnings that makes this bet +. The grand prize is know to be 340mil, but the size of the second place bonus (now at 20 mil) has a much bigger effect on EV than the grand prize.

the effect of this 2nd place bonus is as follows and includes what would happen if the second place prize were split 10 ways. It's not really an EV analysis but gives an idea of the effect that the bonus could have on EV.

prize after 40% tax odds EV
$164,400,000 $98,640,000 1 in 146,107,962 $0.675
$20,000,000 $1,200,000 1 in 3,563,609 $0.337
$10,000 $6,000 1 in 584,432 $0.010
$100 $100 1 in 14,254 $0.007
$100 $100 1 in 11,927 $0.008
$7 $7 1 in 291 $0.024
$7 $7 1 in 745 $0.009
$4 $4 1 in 127 $0.032
$3 $3 1 in 69 $0.044

total EV===> $1.146

It's like having a layover of a well-paying state lottery on top of the grandprize.

Re: Is playing PowerBall currently +EV???
 

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$20,000,000 $1,200,000 1 in 3,563,609 $0.337

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67MM tickets sold.
18.8 expected winners.
Value = $638,297 = .18

total EV===> $.989

Re: Is playing PowerBall currently +EV???
 

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[ QUOTE ]
$20,000,000 $1,200,000 1 in 3,563,609 $0.337

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67MM tickets sold.
18.8 expected winners.
Value = $638,297 = .18

total EV===> $.989

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this also increases the amount in the bonus pool
website says it's at 30 mil mow. add 8.9 cents.

I didn't win-
powerball is rigged.

Re: Is playing PowerBall currently +EV???
 

OMG I WON!!!!







$3

Re: Is playing PowerBall currently +EV???
 

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powerball is rigged.

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Damn right it is.
My wifes office pool had over 200 tickets.
They "won" $3.

Re: Is playing PowerBall currently +EV???
 

It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

Re: Is playing PowerBall currently +EV???
 

These numbers make no sense unless we have sample rates.
Not that I disagree with you. [img]/images/graemlins/wink.gif[/img]

Re: Is playing PowerBall currently +EV???
 

Can pro poker players subtract losing Powerball tickets as a gambling loss?

Re: Is playing PowerBall currently +EV???
 

Expanding on this, if you bought all the combinations could you subtract your losing tickets from your jackpot winnings? If this is the case it's definitely +EV for a whole lot of people.

Re: Is playing PowerBall currently +EV???
 

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It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

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I LOVE IT! Made my night, thanks

Re: Is playing PowerBall currently +EV???
 

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It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

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er. no.

Anyway, the lottery is +utilityEV. $1 doesn't matter to you in the long run, having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect.

The lottery is +utilityEV because of marginal utility. It's -$EV though.

Re: Is playing PowerBall currently +EV???
 

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[ QUOTE ]
It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

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er. no.

Anyway, the lottery is +utilityEV. $1 doesn't matter to you in the long run, having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect.

The lottery is +utilityEV because of marginal utility. It's -$EV though.

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Bingo. It's -EV. But I play it because I want to and having a bajillion dollars would be sweet.

Re: Is playing PowerBall currently +EV???
 

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The lottery is +utilityEV because of marginal utility. It's -$EV though.

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No, the lottery is NEGATIVE EUtility because of marginal utility, at least if we don't consider the value of "hope." You've kind of waved your hands through your argument that "having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect." Well, how close to zero? And how huge, exactly? These things matter a lot considering that the chance of winning the lottery is incredibly small as well. I could say, "Your chance of winning is about zero, so you're just gonna lose money for sure."

Money has nonincreasing marginal utility for essentially everyone. Therefore, a 1 in N chance of winning $N (with no other prizes possible) has a $EV of 0, but is -EUtility for large N since (1/N) * (U($N)) < U($1). Many people are essentially risk-neutral for sufficiently small N; for example, we may have EU=0 if N=2.

It can still be a rational decision to play the lottery because the utility of fantasy is significant compared to the EU loss from the purely financial aspect.