Posted on 12/28/2017 3:09:15 PM PST by blam
The Powerball jackpot for Saturday's drawing is up to $384 million as of 11:00 a.m. ET Thursday. At the same time, the Mega Millions jackpot for Friday's drawing is up to $306 million.
Those are pretty huge chunks of money. However, taking a closer look at the underlying math of the lottery shows that it's probably a bad idea to buy a ticket.
Consider the expected value
When trying to evaluate the outcome of a risky, probabilistic event like the lottery, one of the first things to look at is expected value.
The expected value of a randomly decided process is found by taking all the possible outcomes of the process, multiplying each outcome by its probability, and adding all those numbers up. This gives us a long-run average value for our random process.
Expected value is helpful for assessing gambling outcomes. If my expected value for playing the game, based on the cost of playing and the probabilities of winning different prizes, is positive, then, in the long run, the game will make me money. If the expected value is negative, then this game is a net loser for me.
Lotteries are a great example of this kind of probabilistic process. In Powerball, for each $2 ticket you buy, you choose five numbers between 1 and 69 (represented by white balls in the drawing) and one number between 1 and 26 (the red "powerball"). Prizes are based on how many of the player's chosen numbers match the numbers drawn.
Match all five of the numbers on the white balls and the one on the red powerball, and you win the jackpot. After that, smaller prizes are given out for matching some subset of the numbers.
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(Excerpt) Read more at businessinsider.com ...
The lottery is a tax on people that don’t know math
If you want to play the Lottery, go for it.
The odds are the odds. If you Win it’s the best day of your life, if you don’t Win you got a thrill thinking about “what if” for a few bucks.
If throwing a few bucks at “what if” is a problem, people can drown their sorrows investing in the Mickey D’s Value Menu.
Never appealed to me, never did it. So far, I've broke even :-)
I’d just like out state to get off it’s butt and sell tickets. I’m getting tired of driving to Tenn.
And probably less bad for you than a bag of potato chips, or whatever the alternative purchase might be.
I had always wondered about that myself. I guess they figure that a state or other gov’t. entity would be more responsible for handling what could be a very large sum of money. Well,by now,we can see that is a false assumption. I guess the other thing is that by doing it the way they do that there will always be taxes paid on the payoff. Why they should exact taxes on money that’s already been taxed once or more is beyond me. With a private numbers “racket” any taxes paid would be up to the individual. I guess it’s only a racket if it’s run by individuals. The winnings would most likely be smaller,too.
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