MegaMillions Overlay?

[DoomSlice]

I was under the impression that lotteries were designed so that there was always a negative EV.

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this problem has been mentioned several times.

common concerns that are often neglected are the distribution of payments and taxes. Typically the actual breakeven EV number needs to be calculated as 25-35% of what the advertised jackpot amount is.

[JinX11]

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this problem has been mentioned several times.

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Yes; and there are a number of sites out there on how to analyze the lottery, this being one of them.

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common concerns that are often neglected are the distribution of payments and taxes. Typically the actual breakeven EV number needs to be calculated as 25-35% of what the advertised jackpot amount is.

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Good point. I missed these, as well.

[pzhon]

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Yes; and there are a number of sites out there on how to analyze the lottery, this being one of them.


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That site makes the derivation far too complicated. You don't need to use the Poisson distribution and then sum an infinite series as that site does. You can calculate your expected share of the jackpot by computing the expected jackpot money paid out divided by the number of tickets sold.

The expected total jackpot money paid out is the jackpot times the probability at least one person wins. This is easy to compute if you assume the tickets are independent.

If you have one of N tickets which win independently with probability p, your expected share of the jackpot J is J*(1-(1-p)^N)/N.

[MikeSmith]

I hope you guys are buying lotto tickets for better reasons than the EV, thats all im gonna say.

[BigFishSmallCardRoom]

Thanks for all the input and calculations. I was the winner of the $313 million jackpot a few weeks ago.