Lottery at the +EV Point

[MicroBob]

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Why the "F" are you guys so worried about

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If I don't hit [censored], will I go broke? NO!, will I not retire on time? NO!, is my life affected by it? NO! Will I have to get a loan to pay my bills? NO! Does my girlfriend even care? NO! Will I feel the need to get my money back and play lotto every week until I either go broke or win it? NO!

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GET A GRIP!

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I think this qualifies as one of those 'pot, kettle, black' situations.

[scott2130]

1. The lottery is NOT 340m it IS 160.4m. They always tell you the annuitized value because it is a larger number. The cash payout today is the samller number.

2. Using todays payout it is +EV because there are 140m number combinations that could win.

3. Take the lump sum if you win. An annuity is an investment that will pay out the advertized amount over the next 25 years, including the principle. They do not put alot of effort into finding the best investments for you, so you should easily be able to invest it better yourself.

Feel free to tear my statements apart.

[Dennisa]

If memory serves me correctly, the lump sum is discounted to 40%. its been a few years since I have lived in a powerball state. Tax wise, it could be better to defer pyaments.

[MicroBob]

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1. The lottery is NOT 340m it IS 160.4m. They always tell you the annuitized value because it is a larger number. The cash payout today is the samller number.

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It bothers me that they do this.
Same goes for slot jackpots at casinos.
The person in the ad (billboard or whatever) who won $20k didn't really win $20k. They only REALLY won $12k or whatever.

It's incorrect and misleading imo.


Lotteries also bug me because when I'm at the convenience store just trying to buy some milk or beer or something there's always some shmoe ahead of 8 people in line holding things up because they are buying 37 powerball or scratch-off tickets or whatever and the machine is messing up on the cashier, etc etc.

Or the guy is just standing there trying to decide which idiotic -EV scratch-off game he wants to play.
"Give me 5 of the Lucky 7's...and 5 of the other one with the numbers that go across, and 4....no, make that 6, of the Insta-Super-Fun-Cash-Dopplar-Radar-8000's" blah blah blah.

C'mon dude. I don't want to wait in line forever while you evidently want to give the rest of your rent-money to the state.

[Skipbidder]

One thing to remember when discussing whether or not playing a game with a large progressive jackpot is +EV is that at some point in time money will have a diminishing marginal utility for you.

$240 million is probably not 240 times more valuable to you than $1 million would be.

$240 million is not 240 million times better than one dollar. This will screw up your calculations.

(I didn't see that anyone already mentioned this concept, but I only skimmed.)

[MicroBob]

Yeah. This is a very good point actually.


Everyone goes hyper-spaz when the powerball passes $100-mil (the lump pay-out....not the announced figure) as if playing it when you would ONLY win $40-mil is somehow a waste of time.


To me...winning $100-mil would only be marignally better than winning $40-mil.
I certainly would not be more than twice as excited or happy with $100-mil.

In fact, the thrill of winning $10-mil for me would be difficult to exceed.

Ok, I thought I was good at math, but apparently not. For you super math whizzes out there, why are the odds of getting JUST the powerball right 69-1? Arent there only 54 numbers?

Take a look here:

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

[ace_in_the_hole]

[ QUOTE ]
Yeah. This is a very good point actually.


Everyone goes hyper-spaz when the powerball passes $100-mil (the lump pay-out....not the announced figure) as if playing it when you would ONLY win $40-mil is somehow a waste of time.


To me...winning $100-mil would only be marignally better than winning $40-mil.
I certainly would not be more than twice as excited or happy with $100-mil.

In fact, the thrill of winning $10-mil for me would be difficult to exceed.

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A thrill next years WSOP ME winner may get to experience.

[cianosheehan]

Whether its +EV or not, landing it would seriously enhance your meta game.

[Bigdaddydvo]

I usually buy a Powerball ticket when it's over $100M.

To me it's the fun of thinking about what I'd do with the money and talking with the wife/friends about it that give Powerball superjackpots the intangible +EV characteristic.