Quote: (11-07-2013 06:52 PM)teh_skeeze Wrote:  

I'll only play the lottery if it's +expected value to do so.

+1 for the math equation at least you approach it from a more rational view than the average american-- who considers the lottery their retirement plan.

I generally listen to people smarter than myself on these types of issues. Warren Buffett who has a net worth over over $48 billion on gambling:

Quote:Quote:

"To quite an extent, gambling is a tax on ignorance. I find it socially revolting when the government preys on the ignorance of its citizenry. When the government makes it easy for people to take their Social Security checks and pull [slot machine] handles, it relieves taxes on those who don't fall for it."

The smarter thing would be to invest in Casino stocks. At least the house is on your side.

I've never bought a lotto ticket in my life. Never will. Though whether others do or not is none of my concern.

I knew some folks who actually won the lotto and didn't blow the money or drink themselves into an early grave. They ran a small greasy spoon in the town I grew up in and won millions. Not enough to make their shit stop stinking but enough to make most white trash lose their good sense.

Paid off the house, bought a conservative new vehicle, tucked the rest into low-risk sensible investments, and kept plugging away at that diner, working everyday and living the same lifestyle just with a few nicer things. They actually hit it again years later though not for nearly as much, so I believe they continued buying on a regular basis. As far as I know they're still living their low-key lifestyle and looking at a comfortable old age.

Obviously a rare unfolding - I'm not encouraging anyone to base their future on the lotto. Seems to me it's a hundred if not a thousand times easier getting rich through hard, smart work if you legitimately put your mind to it.

If you're as smart as this chick http://www.forbes.com/sites/kiriblakeley...the-world/
then you should play the lottery.

"In 2011, it was reported that Joan R. Ginther, a former statistics professor, had won four different multi-million dollar jackpots in Texas—three of which came from purchasing scratch-off lottery tickets. It was speculated that there was actually a pattern to where and when the winning tickets were sold, and that Professor Ginther had figured out this pattern.[23] Ms. Ginther was in fact outed a year earlier in the online publication "The Big Retort"."

Quote: (11-07-2013 06:52 PM)teh_skeeze Wrote:  

I'll only play the lottery if it's +expected value to do so.

Example:
Coinflip (50:50 chance)
2 dollars to play
Payout is $1.50
-EV (you will lose out over the long haul)

2 dollars to play
Payout is $5
+EV (over time you will win)

Powerball (roughly 1:176,000,000)
$2 to play
The jackpot needs to be at least $350 million for the bet to be +EV.

The lottery is almost always -EV. There may be one or two drawings a year where your bet actually makes sense. Of course, this is when everyone plays on instinct, and you wind up splitting the pot anyway...

As the jackpot increase to $350 mil wouldn't the odds be getting longer as more people are buying tickets, thus keeping it -ev?

Unless of course the organisers dump a load dead money into the pot..

But the odds to win something, remain the same.

You have a 1 in 176 million chance of winning the powerball at all times. Hes saying to take the bet of 2 dollars, you would need at least 176m x 2 = 352 million to break even.

Lets say it goes to 500 mill jackpot. 500/176 = 2.84. Your two dollar powerball ticket is worth $2.84 at that point. Your +EV.

Lets say two people win that 500 mill jackpot and recieve 250 mil a piece. 250/176 = $1.42. SO you could say that your -EV. But in actuality those tickets are winning tickets and worth 250 mil a piece.

You can determine how many people should hit based off the odds as well. Just divide the number of players by 176 and that gives you your expected number winners. But you can't tell how many people are going to play. And just because the statistics say three, for example, people should win it doesn't mean that three are going to win.

Mathematically the lottery isn't in your favor. Everyone knows that. They play because it gives them hope or entertainment, not because of that are mathematicians.

A while back a friend of mine did a documentary on Lotto winners.

What he found is their success only exaggerated their previous lifestyle.

Most went bankrupt and destroyed their lives. In five years, they were in debt and the lotto was the worst thing ever to happen to them.

There was one exception.

There was a guy really into numerology who won. He only bought ONE lottery ticket his whole life. He bought at it at a specific time of day at a specific gps coordinate with specific numbers. Again, really into numerology.

The money allowed him to do crazy things like call up his favorite band and tell them to make another album. It made him more of who he is - a benefactor of his community. Interesting dude - looked a bit like the Duck Dynasty star.

Belief is a powerful thing. If I played, I'd play like him.

Quote: (12-20-2013 02:03 AM)Hencredible Casanova Wrote:  

I've never bought a lotto ticket in my life. Never will. Though whether others do or not is none of my concern.

yeah, i don't gamble either(never been to vegas and don't play the lotto)

I won't disparage anyone who does it, at least if you can afford to lose that money.

It's stupid NOT to play it now

$900 million bruh



We should make a RVF lotto pool.... then watch the chaos that ensues if we had the winning numbers

1: The odds are usually way against you. Even with a large jackpot multiple people could win. As an example, Megamillions is now estimated to be about $970 million this Friday. The odds of winning is 302 million to 1; at $2 per ticket the 'break even' would be twice that is when the jackpot is $604 million the odds would be equal to the ticket price before taxes or payment method.

On top of that, taxes will take one third, plus there is the question of lump sum payment or over 29 years with an initial payment then 29 payments where the sum grows 5% per year.

2: One ticket, just to have the option to win, even though it is a bad bet on the math, does not seem to be much harm. The problem is where people are putting ina lot more money on something that will at best, statistically pay out what was put in, and at worst lose everything bet.

3: The problem for a lot of lottery winners is that no matter how much they won, a large percentage go through all of the money within a short period of time. There are multiple theories on why this happens:
a: They really do not know how to manage money and simply keep spending until it is all gone.
b: They can't and won't refuse requests for money from family and friends, even when it is for stupid projects and things that are a waste of money.
c: They somehow feel guilty about having the money or that somehow it is wrong so they spend it all in order to get rid of it.
d: They simply can't delay 'having and spending it all now' instead of saving and building for later.

In theory, most people with a large windfall, should be all set for life, especially in cases where the money would allow them to retire and just live off of the interest and/or dividends. Instead in a lot of cases, we see that the people just blow through everything on stupid stuff and end up broke.

This kind of behavior does not just happen at the lower classes or people who have no money, even at the higher income/asset leves, the same stuff goes on.

As an example, the Vanderbilts and The Breakers mansions at Newport, RI. In 1892 construction was started, completed in 1895. The guy was the President of the New York Central Rail Road and worth an estimate $200 million, one of the richest people in the world. They were part of the top echelons of society in the world, had access to vast professional help and the best of anything and everything that money could buy. They also lived through a world war, the 1920s economic expansion and the 1930s depressions (which would have given them all kinds of chances to buy assets for much lower than what they were worth.

And where were they in 1937? Answer, 1937 was the last year of the large house parties. While they still had money, they no longer had the same resources to keep up with their prior lifestyles and The Breakers was basically closed and shutdown.

Today, the descendants of the family, 25 of them, have a trust fund of $21 million or so, and that is all that is left of what was one of the largest fortunes in US History.

I am with the crowd that is like: gamble a set amount only if it is truly disposable... if you come out ahead great, if not so be it.... and walk away. Easier said than done for some, but it has worked for me over the years. And, btw, gambling winning tax is lame.

A lottery ticket has negative expected value, so yes, it is stupid to play it.

Even if you win, do you want to admit being one of these "winners?" Eleven examples of lottery winners who wound up prematurely dead.

As for the Vanderbilts, their legacy is dead - shot up some other guy's colon.

His ancestors would be proud.

A couple of folks and I put 140 bucks last time....we won! We won....four dollars. Excellent ROI.

The beakers weren't Jewish so that's why they ended up broke.

I love playing a craps table at a large casino because or is a social experience, as well as the odds being only 1℅ against you on a passline or come bet if played right. Lotteries are 40% against you or more. Four winning spins in a row in a roulette table will make you a millionaire and it is only 20% against you.

In contrast, the stock market grows by roughly 6% a year.

Quoting four posts from the "Aunt sues nephew over a conjoined lottery ticket" thread:

Quote: (09-02-2018 02:12 PM)Malone Wrote:  

...
When you gamble you know the odds, and they're usually not 1:292M.
...

Quote: (09-02-2018 02:27 PM)kmhour Wrote:  

You could less aggressively refer to the lottery as a tax on people who can't do math.

Not that I haven't bought a ticket a few times when the jackpot has been astronomically high. Or participated in a few work pools.
...

Quote: (09-02-2018 03:18 PM)porscheguy Wrote:  

I’ll buy when the jackpot gets absurdly high. Even though your chance at winning is essentially zero, I’ll still drop $20 on some tickets. Because my chance is the same as anyone else. And it’s not like I’m skipping meals to do it.
<snip>

Quote: (09-03-2018 07:50 AM)Cation Wrote:  

Of course the chances of winning the lottery are astronomically low.

Yet, somebody wins from time to time.

_______________________________________________

Several members have mentioned over the years that lotteries have an inherently negative expected value. Here's a technical explanation highlighting how lotteries have so much negative expected value. It also explains how people know, by instinct, to buy lottery tickets when there is a huge jackpot.

I only buy lottery tickets when the expected value of return is positive.

[NOTE: This post shows some math. It will take some time to read.]

The formula for expected return in lotteries is

To calculate the required jackpot for zero or positive expected value, use the below formula:

, then rearrange to get

Therefore, the formula to find the minimum jackpot to gain a positive return is:

These are maths of a majority of lottery draws (combinations):

Where:
n represents the amount of numbers in the barrel &
r represents the amount of numbers drawn from the barrel

Example of a lottery using 45 numbers & drawing 7 numbers:
45C7
= (45!)/(7!x38!)
= (45x44x43x42x41x40x39)/(7x6x5x4x3x2x1)
= 3x44x43x41x5x39 | [42/(7x6) cancels out, 45/(5x3) = 3 & 40/(4x2) = 5]
= 45379620
Therefore, in a 45 number lottery, the total amount of 7 number combinations is 45 379 620.
To have positive expected value at, let's say, $1.30 per game/combination, the jackpot must be $58 993 504.71 or greater.
1.3 x 45379619 = 58993504.7

Lottery jackpots only become massive when the amount is significantly higher than the total number of combinations. From the previous example, a >$90 million jackpot is massive. Lotteries with jackpots ranging from $200 to more than $500 million would probably have it set up to have over 100s of millions of drawn number combinations.

Combinations of Powerball (US), a lottery utilising the "extra number":
69C5 x 26 (5 numbers drawn out of 69 numbers & the 26 are the "extra number" segment)
= (69!)/(5!x64!) x 26
= (69x68x67x66x65)/(5x4x3x2x1) x 26
= (69x17x67x11x13) x 26 | [68/4 = 17, 66/(3x2) = 11, 65/5 = 13]
= 11238513 x 26
= 292201338
Therefore, from 69 regular numbers & 26 "Powerballs", the total amount of 5 number+Powerball combinations is 292 201 338. There are 11 238 513 seven number combinations when the "Powerball" is not included.
When calculating the lottery odds, calculate the combination component first, then multiply that number of combinations by the "extra number" if the lottery uses one.
To have positive expected value at, let's say, $2 per game/combination, the pre-tax jackpot must be $584 402 674.01 or greater.
2 x 292201337 = 584402674

If you follow the maths of your local lotteries by substituting the relevant numbers in the formula you'll know when to buy a ticket, which would either be approximately 3-5 times a year or never again since lotteries have an inherently negative expected value.

NOTE: The principles of expected value apply to all gambling & investments & is linked to various types of returns.
_______________________________________________

BONUS: Calculating the Mega Millions expected return for October 19, 2018 (11PM ET)

Combinations of Mega Millions (US), a lottery utilising the "extra number":
70C5 x 25 (5 numbers drawn out of 70 numbers & the 25 are the "yellow ball" segment)
= (70!)/(5!x65!) x 25
= (70x69x68x67x66)/(5x4x3x2x1) x 25
= (7x23x17x67x66) x 25 | [70/(5x2) = 7, 69/3 = 23, 68/4 = 17]
= 12103014 x 25
= 302575350
Therefore, from 70 regular numbers & 25 "yellow balls", the total amount of 5 number+"yellow ball" combinations is 302 575 350. There are 12 103 014 seven number combinations when the "yellow ball" is not included.

To have positive expected value at $2 per game/combination, the pre-tax jackpot must be $605 150 700.01 or greater.
2 x 302575350 = 605150700

The estimated pre-tax expected return is:
(970000000 / 605150700) x 100

= 60.29% positive expected return

In the event of a jackpot win, don't sign the ticket straight away, contact an attorney & always take the annuity. I recommend reading about former MLB player Bobby Bonilla's genius annuity related move on the New York Mets on July 1, 2000.
_______________________________________________
"The worth of a man's life is determined by the life changing events he was fated to experience." #128

Quote: (10-18-2018 07:20 PM)66Scorpio Wrote:  

I love playing a craps table at a large casino because it is a social experience, as well as the odds being only 1℅ against you on a passline or come bet if played right. Lotteries are 40% against you or more. Four winning spins in a row in a roulette table will make you a millionaire and it is only 20% against you.

In contrast, the stock market grows by roughly 6% a year.

That's why I like playing (player/banker) baccarat since it acts like its own market and it's simple to play. The betting options are banker, player or tie. House advantage is usually at 1%.

Baccarat is now the world's biggest casino game, so it's a good idea to learn how to play it. If a player understands the hidden pattern of the patterns of baccarat, the options for winning plays increase.

This what a baccarat shoe looks like on those bright screens:

I think there's 19 opportunities to get a win in this shoe.
Note well the large player only streak.
_______________________________________________
"Be a player, not a gambler." #129

Baccarat is like soccer: huge everywhere in the world except America, where blackjack (the closest analog) is more popular and Texas Holdem has swept the USA. In the books and the old Bond movies, 007 plays baccarat (and sometimes craps) In the newer Casino Royale the game is poker.

Bond himself eschews roulette.

At breakfast, the man asked his wife, "What would you do if I won the lottery?"

She replied, "I'd take half, and then leave you."

"Great," he said. "I won $12 yesterday. Here's $6. Stay in touch."

It's pay day. I'll buy 10 bucks worth of tickets. Why not with a jackpot this big.

I don't know where I've seen it, but this quote summarizes my view on the topic:

Lotteries and other such schemes are a tax on stupid people.

Guys are acting like it's always stupid to play the lottery. If it's damn near a billion dollars what's $2 for the off random chance. If I don't win, oh well. Wasn't expecting too. Can't score if you never shoot.

If you "throw" away 5-6$ every day on stupid shit, might as well buy a ticket looking at the jackpot.
The bigger problem I see in people when the lottery topic is brought up in general is that almost all people start dreaming of what they'd do if they win and they keep that dreaming on and on but very very few spend even a quarter of that time to THINK of improving their everyday life or anything they have the power to do so.
Easy wins is a big disease.

For the vast majority of people, a lottery win is their best bet for coming into serious money. We can't all be Bezos.

Probably been said in this thread before, but the lottery is a tax on the poor, or alternately a tax on the stupid. Most people that win one of the smaller prizes, like $60 for 4 numbers out of 7, will blow the winnings on more lottery tickets. Basically, if they accidently win, they keep betting the winnings again until they lose.

The ones who get a $100 million basically fucked up, and once they get that money, they try to blow it all to set things straight.