Lottery at the +EV Point - Page 3

WhiteWolf · #21 10-19-2005, 04:10 PM

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Maybe I'm missing something about how this thing works, but how can it ever be +EV? There's no way the organizers of any lottery would set it up to pay out more money than they're taking in. As long as total revenue > total payout, it has to be -EV for the average player, right? Or is there some magical money fairy who's just adding millions to the prize pool? Especially when you subtract the massive amount lost to taxes, I don't see this being anywhere near +EV. Not that I'd fault anyone for taking a shot with money they're willing to lose. [img]/images/graemlins/tongue.gif[/img]

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The same way Party's BBJ can be +EV at certian times... so long as there are no winners, the prize pool keeps growing until the bet becomes theoretically +EV.

chunk · #22 10-19-2005, 04:13 PM

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Maybe I'm missing something about how this thing works, but how can it ever be +EV? There's no way the organizers of any lottery would set it up to pay out more money than they're taking in. As long as total revenue > total payout, it has to be -EV for the average player, right? Or is there some magical money fairy who's just adding millions to the prize pool? Especially when you subtract the massive amount lost to taxes, I don't see this being anywhere near +EV. Not that I'd fault anyone for taking a shot with money they're willing to lose. [img]/images/graemlins/tongue.gif[/img]

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The reason it can be +EV is because it's progressive. the current prize amount takes into account previous ticket purchases that are no longer eligable to win. So yes the magical money fairies are last week's losers.

lastcoyote · #23 10-19-2005, 04:15 PM

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Maybe I'm missing something about how this thing works, but how can it ever be +EV? There's no way the organizers of any lottery would set it up to pay out more money than they're taking in. As long as total revenue > total payout, it has to be -EV for the average player, right? Or is there some magical money fairy who's just adding millions to the prize pool? Especially when you subtract the massive amount lost to taxes, I don't see this being anywhere near +EV. Not that I'd fault anyone for taking a shot with money they're willing to lose. [img]/images/graemlins/tongue.gif[/img]

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I think the magical money fairies are the ones that played the previous 19 times that it didn't hit. Their money stays in the pool so if you wait until the lotto gets a certain size it can be +EV. Cash value tonight will be $164M so after taxes that's like $100M? Odds are 1 in 146M so it's still not +EV I guess.

To the poster that mentioned the utility: The Powerball starts at $10M so after taxes that would be a cash value of $3M or so. You have to admit that there is a utility difference between $3M and $100M.

AngusThermopyle · #24 10-19-2005, 04:34 PM

EV, utility, lump sum, etc.......

Remember, if you can't swim, don't worry. The fall will probably kill you.

chunk · #25 10-19-2005, 04:38 PM

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It's 180M-1 to hit the powerball jackpot. The jackpot is $340 million. Seems plus EV to me, but my (limited) understanding is the possibility of a split moves it closer to break even. It's even worse if you factor in taxes and the penalty you pay for getting it lump sum (which even the biggest moron on Earth would do).

Jeff

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You can't forget that there are other ways to win nonjackpot prizes which increase EV

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I calculate the total figure as $0.843 worth of EV per $1 ticket.
This includes 40% taxes for the top three prizes and the assumed lump sum payment (and yes taxes definetly effect EV).

What makes this lottery +EV however is the new rule that the grandprize can only grow by 25 mil per drawing and the surplus is divided amongst those that win the second tier prize normally valued at 200,000. This bonus pool is already at 20 mil. odds of hitting are 1 in 3,563,608.

Even with a split grand prize and several splits of the second prize, this is still massively +EV.

jman220 · #26 10-19-2005, 04:54 PM

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btw: $340M (~170M lump sum) is still -EV if you factor in the 40% in taxes (fed/state/city) you pay.

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Why the "F" are you guys so worried about whether or not the lotto is -/+EV or not? Wake up, it's $340 Million at stake! I don't play the stupid thing but I am this time just because it's so damn big. I even blew $20, 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! Will I look back on this moment in life and say geez, if I had not made that loose bet I would be up $20 in gambling instead of being labeled a "looser"? NO! Play the stupid thing and hope you get lucky.

GET A GRIP!

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I posted this more for academic curiosity than anything else. I don't play the lotto, and I wouldn't play it if the jackpot hit 750 million, the odds are just too low for it to be worth my time and money.

jman220 · #27 10-19-2005, 04:56 PM

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Maybe I'm missing something about how this thing works, but how can it ever be +EV? There's no way the organizers of any lottery would set it up to pay out more money than they're taking in. As long as total revenue > total payout, it has to be -EV for the average player, right? Or is there some magical money fairy who's just adding millions to the prize pool? Especially when you subtract the massive amount lost to taxes, I don't see this being anywhere near +EV. Not that I'd fault anyone for taking a shot with money they're willing to lose. [img]/images/graemlins/tongue.gif[/img]

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The magic money fairy is the fact that if nobody hits the lottery, the money rolls over to the next prize pool. Nobody has hit this lottery in a long time, so there has been a lot of rollover.

#28 10-19-2005, 05:24 PM

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I posted this more for academic curiosity than anything else. I don't play the lotto, and I wouldn't play it if the jackpot hit 750 million, the odds are just too low for it to be worth my time and money.

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Yea but its worth buying a few tickets when you can get over 350 million just to look at them and drift off into daydreams until the drawing. I've never played the lottery before, but just had to do it this time

FlFishOn · #29 10-19-2005, 06:07 PM

Even if you might assume (foolishly) that you are the lone winner it looks like a -EV bet. Prolly $1 lotto >> $0.80 prize.

There have been a few +EV plays. Smaller state lottos in the past. I recall a group intending to wheel the lotto and the lottery commission wouldn't sell them a wheel ticket. That's like saying we don't want $X million in extra revenue. What are the odds of a state functionairy pissing away a few $million?

#30 10-19-2005, 06:45 PM

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btw: $340M (~170M lump sum) is still -EV if you factor in the 40% in taxes (fed/state/city) you pay.

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Why the "F" are you guys so worried about whether or not the lotto is -/+EV or not? Wake up, it's $340 Million at stake! I don't play the stupid thing but I am this time just because it's so damn big. I even blew $20, 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! Will I look back on this moment in life and say geez, if I had not made that loose bet I would be up $20 in gambling instead of being labeled a "looser"? NO! Play the stupid thing and hope you get lucky.

GET A GRIP!

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I posted this more for academic curiosity than anything else. I don't play the lotto, and I wouldn't play it if the jackpot hit 750 million, the odds are just too low for it to be worth my time and money.

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You are just plain dumb.