16 ms·

How the Powerball rules were tweaked to make the game an even bigger ripoff

108 points by paradygm 11y ago

ForHackernews 11y ago
Counterpoint: The true value of a lotto ticket is dreaming about hitting the jackpot. Bigger, less winnable jackpots increase the dream-value of the tickets.
- branchless 11y ago
  The new American dream now that social mobility is demonstrably low.
- thearn4 11y ago
  This is true, for many people playing the lottery is a means to attach a nonzero probability (no matter how small) to a fantasy. For myself, I'm uncertain how much of a fantasy it would really be to suddenly hold ~$1B (though I obviously wouldn't hesitate to try..). But have you ever played a video game, then discover an exploit or cheat code to give you everything you want, then realize how boring and pointless it became relatively soon afterwards? Part of me wonders if shuffling all the way across Maslow's hierarchy of needs in the real world would have the same psychological effect. I think we crave a certain comfortable level of struggle.
  - ceejayoz 11y ago
    > But have you ever played a video game, then discover an exploit or cheat code to give you everything you want, then realize how boring and pointless it became relatively soon afterwards? I don't think that's a great comparison. You've removed the point of the game by cheating, but the point of life isn't "accrue $1 billion".
  - jkereako 11y ago
    > I think we crave a certain comfortable level of struggle. For years, my greatest fear has been to win the lottery because of that reason exactly. I don't know what I would do with my life. And it would cause all sorts of stress among friends, family members and potentially strangers. Regardless, I still bought a ticket.
    - brazzledazzle 11y ago
      If possible I'd claim it in secret. I've heard that you can create a trust to do so but I'm not sure if there's truth to that or not. I'm also not sure how I'd be able to secretly help friends and family so it may be moot or just a temporary measure.
      - StevenNunez 11y ago
        http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/#2715e4857a0b4a43e4dc3776 http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-thi... Looks some good first steps.
  - HCIdivision17 11y ago
    No doubt, but it's a problem I'm willing to struggle with :) I think it's part of the worry people have had for ages and ages: what do you do idle? Do you find things to do? Or just stop doing things? Or do you create and/or learn a skill? Do you work harder to leverage it all for power?
    - clentaminator 11y ago
      Well, do you have hobbies? Interests? Things that you think about wanted to do when you're at work? Things you have to stop doing because gosh darnit you need to get up for work tomorrow even though you'd rather carry on until morning? If you have those, then why not do them more? All those things you enjoy and do without question or thought, or wanted to try, those are the things that you do.
      - HCIdivision17 11y ago
        Yup. I suspect I (with likely a large number of people who tend to sites like this) would have no problem filling our time well. And for those that don't, I'd bet a good number of them could learn to :)
  - Retric 11y ago
    There is some research on this. Assuming you make ~75+k winning the lottery would probably have minimal impact on your long term happiness. Sure, work is a non issue, but you get a whole new set of concerns.
    - elif 11y ago
      I think that's probably true for most people, but not a given. `Mo Money Mo Problems` is true if you use your money to buy things, celebrity, social/political status. It's not true if you start an incubator with no expected returns, start a charity, etc.
  - logfromblammo 11y ago
    But real life has an infinite amount of unlockable content.
  - ForHackernews 11y ago
    > for many people playing the lottery is a means to attach a nonzero probability (no matter how small) to a fantasy Probably the same reason people found startups.
- jamespitts 11y ago
  Totally agree. Calling the game a ripoff is unfair. Ripoff is a deception, yet Powerball is completely honest about its mechanism. Participants understand that they are playing a game with a low chance of winning, but they do get a lot of value out of the ticket. Otherwise, with so much information available, why would they play? If we worry about participants not being able to "understand" these sorts of large odds, we might be better off worrying over much graver yet common situations. Do we understand the price of not paying attention in elementary school math class? The pitfalls of not having various kinds of insurance? Or even driving on the freeway?
  - ahallock 11y ago
    > Participants understand that they are playing a game with a low chance of winning I see poor people lined up at my local convenient store, spending considerable amounts of their money on scratch offs and lottery tickets. They actually don't understand or are addicted, and the gov doesn't care, so long as they're getting money out of it. Who's going to regulate the regulators? It's not like the State limits how many you can buy.
    - icebraining 11y ago
      Why do you say they either don't understand or are addicted? Have you asked them, or are you just assuming that there's no possible alternative? And are you sure that the money would be better spent if it couldn't be spent on lottery tickets?
      - ahallock 11y ago
        I'm pointing out the hypocrisy in government, how they crack down on illegal gambling because of its vice, yet exploit the poor with State endorsed gambling. What are the alternatives? I'm sure they enjoy it, but that's part of addiction -- not being able to delay pleasure in the present for future rewards. They could save their money, buy new clothes, get some dental work done, etc. I'm not saying we force them or that we should deny people ostensibly-wasteful pleasures--a drink is fine every now and then, but when someone goes over the edge into full-blown alcoholism, I think society should extend a helping hand.
- falcolas 11y ago
  Counterpoint(s) to this theory: http://lesswrong.com/lw/hl/lotteries_a_waste_of_hope/ http://lesswrong.com/lw/hl/lotteries_a_waste_of_hope/ and http://lesswrong.com/lw/hm/new_improved_lottery/ http://lesswrong.com/lw/hm/new_improved_lottery/ Care of ikeboy on the lottery simulator thread. https://news.ycombinator.com/item?id=10868702 https://news.ycombinator.com/item?id=10868702
- matwood 11y ago
  Exactly. I'll buy a ticket on my way home because it'll be a fun game for $2. I think this will be my third or fourth ticket I've ever purchased. I know I will not win, but it is still exciting. It is the same reason I play craps when I go to Las Vegas - entertainment.
martinko 11y ago
Saying the game is a bigger ripoff after odds change without discussing changes to expected values and then going on to say: > people don't understand odds Is quite ironic.
ceejayoz 11y ago
"Dec. 23, 2015: A prominent lottery official who has run the Powerball game since its inception was quietly removed from his 28-year post leading the Multi-State Lottery Association after a jackpot-fixing scandal inside his organization had spread, according to a document obtained by The Associated Press." http://bigstory.ap.org/article/63f14f1932164832a7f571d0c1b4e967/apnewsbreak-key-lottery-leader-out-amid-jackpot-fixing-case http://bigstory.ap.org/article/63f14f1932164832a7f571d0c1b4e... Certainly interesting timing.
- JoeAltmaier 11y ago
  Wow - they're handling this with kid gloves. No FBI escorting him handcuffed from the building. Just an exit interview about "how they could improve security". He stole millions!
  - pmalynin 11y ago
    No one wants a hoo-haa on these levels.
    - scott_s 11y ago
      I think that is demonstrably not true, as the person who committed the fraud has been convicted: http://www.nydailynews.com/news/national/lottery-fixing-scandal-spreads-nationwide-article-1.2470819 http://www.nydailynews.com/news/national/lottery-fixing-scan...
  - scott_s 11y ago
    That's because the person fired has not been charged with a crime. Nor does it seem anyone even suspects him of a crime. Strutt, who this article is about, was the executive director of the lottery. Tipton, the security director, has been convicted of fraud. Tipton stole millions. There seems to be no evidence that Strutt stole anything. (If there was, I assume they would have also charged him.) This is a typical "heads will roll" situation. Strutt was the leader, a serious crime happened during his watch, and he's being replaced because of it.
deleted 11y ago
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CIPHERSTONE 11y ago
"Never tell me the odds!" -Han Solo
- ctdonath 11y ago
  Odds are you're about 10x more likely to die while driving to buy the ticket than you are of picking a winning one.
strictnein 11y ago
For the curious, at the current jackpot level, with a cash lump sum payout of $930 million, the expected average return on a $2 ticket is $3.50. Unfortunately, that's before tax. After tax (45% for estimation purposes, this will vary by state) it's $1.93. After taxes, the lump sum payout would need to be around $970 million for it to average a $2 payout on a $2 ticket. This doesn't include the possibility of you splitting the money with another winner, but it also doesn't include the additional value of the money if you invested it wisely, etc.
- SonicSoul 11y ago
  since you can also invest the $2 wisely, isn't future value irrelevant in this equation?
  - strictnein 11y ago
    Sure, probably, but it's also easier to earn more on $200 million than on $2, but then I guess I'm really splitting hairs.
  - waterlesscloud 11y ago
    The key fact here that in fact you cannot invest $2 wisely.
    - ctdonath 11y ago
      Vanishingly few lotto players buy one ticket (or very few) ever. As another poster noted, players tend to gamble $100-500 annually (inversely proportional to their income). Investing that can be done wisely (even just leaving it in an interest-bearing bank account gives an assured average net profit).
- deleted 11y ago
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- jrs235 11y ago
  With an estimated 1 billion tickets sold, one should expect splitting the jackpot 2, 3, or 4 ways. Making the expected average return much much worse.
jfoutz 11y ago
There will likely be a winner, or multiple winners today. If not, it'll be +EV to play in the next drawing, and might be already. It's $2 * 292M, $584M minimum payout, for the odds to be in your favor. Expected payout is now up to $930 * (1 - 0.395), so $562M after federal taxes. Depends on state taxes, and if the estimate is a little low, only about $20M short this morning.
- auntienomen 11y ago
  It's never positive EV, once you account for taxes and the odds of multiple winners. It may, of course, have positive utility.
  - jfoutz 11y ago
    Ah, the split. Yeah. seems like the jackpot went up $400M, so i'll guess around that many tickets sold. each number has been sold around 1.4 times, blowing the odds.
    - toast0 11y ago
      The ticket price is $2, so there's more room than you think.
  - bryanlarsen 11y ago
    Some lottery setups do go to positive EV when the prizes get really large, and I expect that even the powerball would if nobody wins today. For example, the Canadian 6/49 goes to positive EV at around $40M. But Canada has higher payout ratio, no taxes and no lump sum silliness.
    - auntienomen 11y ago
      Some do, usually because of some structure in the secondary prizes. In Powerball, the top prize is basically everything, and the likelihood of a split jackpot increases very fast as the jackpot grows.
grandalf 11y ago
Experts aren't entirely sure why "those who can least afford it play the most," as German sociologists asked in a 2013 paper. The pessimistic, and perhaps condescending, view is that the poor and less-educated don't have the intellectual gifts to appraise the odds, but middle-class and rich people play the lottery too. This perspective is deeply flawed. If humans obeyed a risk adjusted rate of return strategy and rationally discounted for the future, human behavior across the board would be profoundly different. The lottery is only one example of many. Any portfolio of early stage startups is destined to perform worse than the S&P500, as is any portfolio of series A startups. As is any portfolio of lottery tickets... but there is always that winning ticket, that Facebook, that Google. There have been very few big homerun startups. The rest would fail to lift the average above the S&P. In an environment where the future seems fairly certain (poverty, affluence, whatever) there is lots to be gained by rolling the dice and experiencing a bit of risk. Lotto is less fun than a startup, but it scratches the same itch. It lets you ride the emotional roller coaster and imagine the greatness that will one day be yours. Startups are a superior version of lotto because you get to be the CEO or the CTO and someone invests their money to help you build a team and get traction, etc. So your bet with destiny is being underwritten by others. You get advisors, board members, and metrics, and essentially spread the thrill of the tumbling balls across however long your runway lasts. The superiority of startups is why young affluent people do them, and why poor people play lotto. The urge to take on risk is what got humans onto ships, rockets, and bathyspheres. It's the unique human ability to reason probabilistically and take a leap, to undertake a calculated risk, and to engage in an exciting dance with destiny. For centuries and in pre-enlightenment times, people believed that all of life was fated and that one's lot was destined from birth. When we appreciate the emotional thrill of risk we start to see that it's part of the glorious awakening of the human sprit birthed in the enlightenment. When a dejected person puts his last quarter into a slot machine, we are not seeing hopelessness, we are seeing hope in its most unfettered form. Even if he loses that person will pick himself up and dust off and be ready to try again, for fate is on his side. This stands in stark contrast with the previous worldview in which the quarter would be saved and a prayer offered up, which has far smaller odds of success than the slot machine.
- tetraodonpuffer 11y ago
Spooky23 11y ago
I find it puzzling that the reaction to the lottery here on HN and among many tech people I know is very different to say... fantasy sports betting. With sports betting, not only do you have the prospect of wasting lots of time, but you end up getting hooked to obsessive watching of ESPN and tracking player stats, wasting lots of time. With lotto, I drop $2 and I'm done. Yet the consensus seems to be the the millions of people buying lotto tickets are all rubes, but the folks flouting the law and running bookmaking operations on the internet are disrupting staid government regulation?
- djrogers 11y ago
  Yeah, but to some people all of the things in your second paragraph are FUN - not a waste of time. Pretty condescending attitude man...
  - scrollaway 11y ago
    GP wasn't condescending at all but was merely pointing out how it's condescending and hypocritical to look down on people playing the lottery when the attitude is different wrt sports bets.
    - mason240 11y ago
      They are two very different things though. Even the OP acknowledges that's less about the outcome and more about the experience (which is the opposite for lottos). Cutting right to the more meta part of the discussion, it's just false equivalency constructed that hits both a desire to dump on sports fans and find a way to make an absurdly irresponsible habit practiced mostly by lower income people more palatable.
  - TeMPOraL 11y ago
    And so is most of the gambling. Whether poker, roulette or slot machines, a lot of people would tell you they're doing it for the pleasure. But in a way, a lot of things are gambling - up to and including investing, particularly in startups. The desirability of a particular form of gambling in society is tied to the negative effects it has on people (e.g. how easy is it for a player to get addicted), and how exploitative the organizations operating a given game are. Under those metrics, fantasy sports are very much like lottery or one-armed bandit, and very much unlike investing. And hell, it's not just about being condescending to people. I'm perplexed by how people tolerate, and even vocally support companies that intentionally fuck over poor people.
jccalhoun 11y ago
I found this statistic to be the most interesting: "In 1999, researchers at Duke University reported that American households spent an average of $162 per year on lottery tickets, but low-income households spent $289 and those with less than $10,000 in income spent $597. Higher lottery purchases also were associated with lower educational attainment and ethnic minorities." I didn't find the fact that poorer people were more likely to play surprising but just how much more. Nor would I have guessed that the overall average was anywhere near $162 a year. I don't think I've spend that much on the lottery in my 20+ years of being old enough to play the lottery.
- pavel_lishin 11y ago
  Yeah, it makes me want to look at the numbers. We as a family spend maybe $20; so are there households that are spending tens of thousands?
  - knodi123 11y ago
    Perhaps, but I think it more likely that there are tens of thousands that spend a little more than the average. I was shocked the first time I realized how big some lottery-playing communities are, and to what extent it's actually a social activity.
  - gozur88 11y ago
    Oh yes. There's a customer at my local 7-11 who spends a couple hundred bucks on every powerball draw. That's a twenty grand over the course of a year, and that's assuming she doesn't play other games. I have no idea how much money she has, but she doesn't spend much on her clothes or car.
    - rosege 11y ago
      get rich or die trying
- dwc 11y ago
  I think the median numbers (in combination with mean) would be very interesting. I am suspicious that numbers like that are not spread anywhere close to evenly through those demographic groups.
tribune 11y ago
Larger jackpots will sell more tickets. When half the country is buying tickets for a historic jackpot, Powerball (and therefore the States) will take in much more money than if this same jackpot was split over several drawings.
jdmichal 11y ago
It's mentioned that some states were looking at dropping Powerball because the jackpots were won too often and didn't grow big enough to generate excitement. Maybe this points to the fact that people are playing -- and paying -- for the excitement? After all, if your goal was to actually win the jackpot, it seems like you'd be one of the ones playing every week. But there obviously weren't enough of those people to keep the game going.
ck2 11y ago
By the way, as of Wednesday morning, Powerball reports "only" 85% of all number combinations have been sold. So still a 15% chance no-one wins.
georgecmu 11y ago
Off-topic question: Here's a past (yesterday's) submission: https://news.ycombinator.com/item?id=10891465 https://news.ycombinator.com/item?id=10891465 Linked URLs are identical, so how did it pass the 'previously submitted' filter?
bnegreve 11y ago
> Experts aren't entirely sure why "those who can least afford it play the most, Is this that irrational? With 1000 trials, probability of winning at least one time is 3*10^-6 which is low. But what are the odds of becoming a billionaire given that your annual income is below $10,000?
- pdabbadabba 11y ago
  Assuming that one's goal is to become a billionaire, maybe Powerball is rational for people with low incomes. But is that a rational goal to have? Wouldn't a person be better off prioritizing more modest improvements to one's finances through other strategies with a high probability of success? That being said, not everything in life must be rational. If there are people out there who get a lot out of dreaming of becoming a billionaire and playing Powerball, I have no problem with it. But I do have a problem with governments praying on these aspirations to raise money.
- dragontamer 11y ago
  > But what are the odds of becoming a billionaire given that your annual income is below $10,000? Much much worse when you're spending all your money on lotto tickets. Its probably not a good idea to try to become a billionare. A millionare is within the realm of possibility, especially if you set your expectations to produce a millionare in your family over the next generation.
mikestew 11y ago
If someone finally wins, the best part will be a temporary moratorium on people who think themselves clever telling me how I won't win. Yes, the odds are clearly published and I can do basic math, but I bought a few tickets anyway. Now shut up about it. Even NPR isn't immune, as evidenced while I listened on the ride to work yesterday. YES, I KNOW!
guelo 11y ago
As a kid in the 80s I wrote a program in Basic to randomly pick lottery numbers and print them as fast as it could and stop when it matched a predefined number. Watching the program spin for hours disabused me of any notion that the lottery could be won. It was a good way to get a feel for the ridiculous odds involved and to this day I've never felt tempted to play the lottery.
- clentaminator 11y ago
  I also like comparisons to the chances of other things happening as a way to get a feel for the odds, for example you're (apparently) more likely to be killed by a vending machine (1 in 112,000,000), become US president (1 in 10,000,000), or become an astronaut (1 in 12,000,000), than win the powerball. Of course, just because your program never found the right numbers, doesn't mean it couldn't. People do win...
  - spaulo12 11y ago
    the chance of becoming POTUS is ridiculous. that chance goes way up if you're a white Christian male lawyer with an Ivy League education, and go way down if you're anything but.
  - dtparr 11y ago
    I'm curious about some of those numbers. In particular, it seems unlikely that one is more likely to become US President than an astronaut given that we have an order of magnitude more astronauts than presidents. Are the populations different?
tgb 11y ago
So why didn't they decrease the odds even further? The change of a factor of two or so doesn't seem like much and I don't see a real downside until it actually gets to the point where everyone 'knows' that winning is actually impossible since no one does it.
tgb 11y ago
So why didn't they decrease the odds even further? The change of a factor of two or so doesn't seem like much and I don't see a real downside until it actually gets to the point where everyone 'knows' that winning is actually impossible since no one does it.
kaonashi 11y ago
They did this so that the lottery overall was less of a regressive tax on the poor. It's not a rip-off at all, it's actually much fairer. We desperately need something similar with our tax code as a whole.
- Mz 11y ago
  That may be the result, but that is not why they did it. If you read the article, they did it because sales were down and altering the odds so as to end up with some crazy high jackpot was a known way to get sales back up.
- placeybordeaux 11y ago
  What do you mean?
  - theobon 11y ago
    My guess is that as the pot increases people of a higher income get interested. I can see an argument that if the pot increases from $1M to $10M in likelihood of someone that makes $100k/y buys a ticket will increase by more than 10 times while someone that makes $10k/y wont. Part of it is the hype and part the impact to your life being large enough to override reason. It would be interesting to see if there are any studies that show that trend and where it cuts off.
  - Mz 11y ago
    I think the GP means that odds of getting a small win -- i.e. $4 -- went up and odds of winning big went down. So you are more likely to get your money back in small wins. Since poor people play more, they are disproportionately likely to benefit from the increase in small wins, thereby defraying their costs a bit.
corbinpage 11y ago
Personally, I see the lottery as an opt-in tax on hope geared towards the poor.
- dmerrick 11y ago
  I've always thought of it as a tax on people who are bad at math.
sleepychu 11y ago
How on earth have they arrived at odds which aren't an integer result for a lottery? http://www.trbimg.com/img-56954025/turbine/la-fi-mh-powerball-rules-were-tweaked-20160112-002/750/750x422 http://www.trbimg.com/img-56954025/turbine/la-fi-mh-powerbal...
- scottmsul 11y ago
  Not only do you have match n numbers, you must also not match n+1, n+2, etc., otherwise you win a different prize.
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mcintyre1994 11y ago
This is interesting because the UK lottery made a very similar change, with the same effect - higher odds of winning any prize, lower odds of winning. They also doubled the entry price to £2. They changed the numbers to choose from 1-49 to 1-59, and added a prize for matching any 2 (apparently 1 in 10.3 odds) of a free lucky dip (ie another play). It'd be interesting to know the distribution of people's picks now - I know that my parents use the same numbers they always have, all in the 1-49 range. Obviously lucky dips are more fair, I'm not sure which is more common though.
dsp1234 11y ago
(all of this is based on an idea from another poster in a different thread, which I cannot find at the moment) odds of winning: 1 in 292,200,000 (approx) miles between LA and NYC: 2,800 (approx) feet in a mile: 5,280 inches in a foot: 12 US dimes in an inch: 1.4 (approx) 2800 miles * 5280 feet * 12 inches * 1.4 dimes = 248,371,200 "dimes" between LA and NYC Summary: Assume that someone drove from LA to NYC at stopped at any point of their choosing along the way and threw a dime onto the ground. Starting from LA you drive the same route, you have better odds of stopping your car at the exact spot that that person dropped their dime than you do of winning this Jackpot. With all the usual caveats about not being evenly distributed. I find this a little easier to explain to people, such that they can reasonably understand that it's not just "unlikely". Stuff like 10 times as likely to be hit by a meteorite or other super rare events just doesn't seem to get the point across as well. It's also easier to break it down into smaller pieces (throw dimes on the ground and have people try to pick the right one, guess a mile marker just in Colorado, etc)
- choward 11y ago
  For people who care more about their units: 2800 miles/distance_between_LA_and_New York * 5280 feet/mile * 12 inches/feet * 1.4 dimes/inch = 248,371,200 dimes/distance_between_LA_and_NYC
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- ratsmack 11y ago
  People go to casino's every day and for every winner there is a looser, and in the middle the house takes a cut. The Lottery is no different except that the pot is a little larger as in the case of Powerball. It is entertainment pure and simple, so if someone spends $200 per year entertaining themselves, I can't see a problem with it. The -odds- are that someone is going to win, and if you don't play at all, it is impossible to win.
  - vlunkr 11y ago
emehrkay 11y ago
I spent almost 300k in that simulator and only won ~7k. I thought I'd hit big. I still put up 2 bucks for tonight though :( Anyway, the cheeky FAQ on the PowerBall site is worth money down the drain http://www.powerball.com/pb_contact.asp#odds http://www.powerball.com/pb_contact.asp#odds

108 points by paradygm 11y ago

Counterpoint: The true value of a lotto ticket is dreaming about hitting the jackpot. Bigger, less winnable jackpots increase the dream-value of the tickets.

branchless 11y ago
The new American dream now that social mobility is demonstrably low.
thearn4 11y ago
This is true, for many people playing the lottery is a means to attach a nonzero probability (no matter how small) to a fantasy. For myself, I'm uncertain how much of a fantasy it would really be to suddenly hold ~$1B (though I obviously wouldn't hesitate to try..). But have you ever played a video game, then discover an exploit or cheat code to give you everything you want, then realize how boring and pointless it became relatively soon afterwards? Part of me wonders if shuffling all the way across Maslow's hierarchy of needs in the real world would have the same psychological effect. I think we crave a certain comfortable level of struggle.
- ceejayoz 11y ago
  > But have you ever played a video game, then discover an exploit or cheat code to give you everything you want, then realize how boring and pointless it became relatively soon afterwards? I don't think that's a great comparison. You've removed the point of the game by cheating, but the point of life isn't "accrue $1 billion".
- jkereako 11y ago
  > I think we crave a certain comfortable level of struggle. For years, my greatest fear has been to win the lottery because of that reason exactly. I don't know what I would do with my life. And it would cause all sorts of stress among friends, family members and potentially strangers. Regardless, I still bought a ticket.
  - brazzledazzle 11y ago
    If possible I'd claim it in secret. I've heard that you can create a trust to do so but I'm not sure if there's truth to that or not. I'm also not sure how I'd be able to secretly help friends and family so it may be moot or just a temporary measure.
    - StevenNunez 11y ago
      http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/#2715e4857a0b4a43e4dc3776 http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-thi... Looks some good first steps.
- HCIdivision17 11y ago
  No doubt, but it's a problem I'm willing to struggle with :) I think it's part of the worry people have had for ages and ages: what do you do idle? Do you find things to do? Or just stop doing things? Or do you create and/or learn a skill? Do you work harder to leverage it all for power?
  - clentaminator 11y ago
    Well, do you have hobbies? Interests? Things that you think about wanted to do when you're at work? Things you have to stop doing because gosh darnit you need to get up for work tomorrow even though you'd rather carry on until morning? If you have those, then why not do them more? All those things you enjoy and do without question or thought, or wanted to try, those are the things that you do.
    - HCIdivision17 11y ago
      Yup. I suspect I (with likely a large number of people who tend to sites like this) would have no problem filling our time well. And for those that don't, I'd bet a good number of them could learn to :)
- Retric 11y ago
  There is some research on this. Assuming you make ~75+k winning the lottery would probably have minimal impact on your long term happiness. Sure, work is a non issue, but you get a whole new set of concerns.
  - elif 11y ago
    I think that's probably true for most people, but not a given. `Mo Money Mo Problems` is true if you use your money to buy things, celebrity, social/political status. It's not true if you start an incubator with no expected returns, start a charity, etc.
- logfromblammo 11y ago
  But real life has an infinite amount of unlockable content.
- ForHackernews 11y ago
  > for many people playing the lottery is a means to attach a nonzero probability (no matter how small) to a fantasy Probably the same reason people found startups.
jamespitts 11y ago
Totally agree. Calling the game a ripoff is unfair. Ripoff is a deception, yet Powerball is completely honest about its mechanism. Participants understand that they are playing a game with a low chance of winning, but they do get a lot of value out of the ticket. Otherwise, with so much information available, why would they play? If we worry about participants not being able to "understand" these sorts of large odds, we might be better off worrying over much graver yet common situations. Do we understand the price of not paying attention in elementary school math class? The pitfalls of not having various kinds of insurance? Or even driving on the freeway?
- ahallock 11y ago
  > Participants understand that they are playing a game with a low chance of winning I see poor people lined up at my local convenient store, spending considerable amounts of their money on scratch offs and lottery tickets. They actually don't understand or are addicted, and the gov doesn't care, so long as they're getting money out of it. Who's going to regulate the regulators? It's not like the State limits how many you can buy.
  - icebraining 11y ago
    Why do you say they either don't understand or are addicted? Have you asked them, or are you just assuming that there's no possible alternative? And are you sure that the money would be better spent if it couldn't be spent on lottery tickets?
    - ahallock 11y ago
      I'm pointing out the hypocrisy in government, how they crack down on illegal gambling because of its vice, yet exploit the poor with State endorsed gambling. What are the alternatives? I'm sure they enjoy it, but that's part of addiction -- not being able to delay pleasure in the present for future rewards. They could save their money, buy new clothes, get some dental work done, etc. I'm not saying we force them or that we should deny people ostensibly-wasteful pleasures--a drink is fine every now and then, but when someone goes over the edge into full-blown alcoholism, I think society should extend a helping hand.
falcolas 11y ago
Counterpoint(s) to this theory: http://lesswrong.com/lw/hl/lotteries_a_waste_of_hope/ http://lesswrong.com/lw/hl/lotteries_a_waste_of_hope/ and http://lesswrong.com/lw/hm/new_improved_lottery/ http://lesswrong.com/lw/hm/new_improved_lottery/ Care of ikeboy on the lottery simulator thread. https://news.ycombinator.com/item?id=10868702 https://news.ycombinator.com/item?id=10868702
matwood 11y ago
Exactly. I'll buy a ticket on my way home because it'll be a fun game for $2. I think this will be my third or fourth ticket I've ever purchased. I know I will not win, but it is still exciting. It is the same reason I play craps when I go to Las Vegas - entertainment.

martinko 11y ago

Saying the game is a bigger ripoff after odds change without discussing changes to expected values and then going on to say: > people don't understand odds Is quite ironic.

ceejayoz 11y ago

"Dec. 23, 2015: A prominent lottery official who has run the Powerball game since its inception was quietly removed from his 28-year post leading the Multi-State Lottery Association after a jackpot-fixing scandal inside his organization had spread, according to a document obtained by The Associated Press." http://bigstory.ap.org/article/63f14f1932164832a7f571d0c1b4e967/apnewsbreak-key-lottery-leader-out-amid-jackpot-fixing-case http://bigstory.ap.org/article/63f14f1932164832a7f571d0c1b4e... Certainly interesting timing.

JoeAltmaier 11y ago
Wow - they're handling this with kid gloves. No FBI escorting him handcuffed from the building. Just an exit interview about "how they could improve security". He stole millions!
- pmalynin 11y ago
  No one wants a hoo-haa on these levels.
  - scott_s 11y ago
    I think that is demonstrably not true, as the person who committed the fraud has been convicted: http://www.nydailynews.com/news/national/lottery-fixing-scandal-spreads-nationwide-article-1.2470819 http://www.nydailynews.com/news/national/lottery-fixing-scan...
- scott_s 11y ago
  That's because the person fired has not been charged with a crime. Nor does it seem anyone even suspects him of a crime. Strutt, who this article is about, was the executive director of the lottery. Tipton, the security director, has been convicted of fraud. Tipton stole millions. There seems to be no evidence that Strutt stole anything. (If there was, I assume they would have also charged him.) This is a typical "heads will roll" situation. Strutt was the leader, a serious crime happened during his watch, and he's being replaced because of it.

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CIPHERSTONE 11y ago

"Never tell me the odds!" -Han Solo

ctdonath 11y ago
Odds are you're about 10x more likely to die while driving to buy the ticket than you are of picking a winning one.

strictnein 11y ago

For the curious, at the current jackpot level, with a cash lump sum payout of $930 million, the expected average return on a $2 ticket is $3.50. Unfortunately, that's before tax. After tax (45% for estimation purposes, this will vary by state) it's $1.93. After taxes, the lump sum payout would need to be around $970 million for it to average a $2 payout on a $2 ticket. This doesn't include the possibility of you splitting the money with another winner, but it also doesn't include the additional value of the money if you invested it wisely, etc.

SonicSoul 11y ago
since you can also invest the $2 wisely, isn't future value irrelevant in this equation?
- strictnein 11y ago
  Sure, probably, but it's also easier to earn more on $200 million than on $2, but then I guess I'm really splitting hairs.
- waterlesscloud 11y ago
  The key fact here that in fact you cannot invest $2 wisely.
  - ctdonath 11y ago
    Vanishingly few lotto players buy one ticket (or very few) ever. As another poster noted, players tend to gamble $100-500 annually (inversely proportional to their income). Investing that can be done wisely (even just leaving it in an interest-bearing bank account gives an assured average net profit).
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jrs235 11y ago
With an estimated 1 billion tickets sold, one should expect splitting the jackpot 2, 3, or 4 ways. Making the expected average return much much worse.

jfoutz 11y ago

There will likely be a winner, or multiple winners today. If not, it'll be +EV to play in the next drawing, and might be already. It's $2 * 292M, $584M minimum payout, for the odds to be in your favor. Expected payout is now up to $930 * (1 - 0.395), so $562M after federal taxes. Depends on state taxes, and if the estimate is a little low, only about $20M short this morning.

auntienomen 11y ago
It's never positive EV, once you account for taxes and the odds of multiple winners. It may, of course, have positive utility.
- jfoutz 11y ago
  Ah, the split. Yeah. seems like the jackpot went up $400M, so i'll guess around that many tickets sold. each number has been sold around 1.4 times, blowing the odds.
  - toast0 11y ago
    The ticket price is $2, so there's more room than you think.
- bryanlarsen 11y ago
  Some lottery setups do go to positive EV when the prizes get really large, and I expect that even the powerball would if nobody wins today. For example, the Canadian 6/49 goes to positive EV at around $40M. But Canada has higher payout ratio, no taxes and no lump sum silliness.
  - auntienomen 11y ago
    Some do, usually because of some structure in the secondary prizes. In Powerball, the top prize is basically everything, and the likelihood of a split jackpot increases very fast as the jackpot grows.

grandalf 11y ago

Experts aren't entirely sure why "those who can least afford it play the most," as German sociologists asked in a 2013 paper. The pessimistic, and perhaps condescending, view is that the poor and less-educated don't have the intellectual gifts to appraise the odds, but middle-class and rich people play the lottery too. This perspective is deeply flawed. If humans obeyed a risk adjusted rate of return strategy and rationally discounted for the future, human behavior across the board would be profoundly different. The lottery is only one example of many. Any portfolio of early stage startups is destined to perform worse than the S&P500, as is any portfolio of series A startups. As is any portfolio of lottery tickets... but there is always that winning ticket, that Facebook, that Google. There have been very few big homerun startups. The rest would fail to lift the average above the S&P. In an environment where the future seems fairly certain (poverty, affluence, whatever) there is lots to be gained by rolling the dice and experiencing a bit of risk. Lotto is less fun than a startup, but it scratches the same itch. It lets you ride the emotional roller coaster and imagine the greatness that will one day be yours. Startups are a superior version of lotto because you get to be the CEO or the CTO and someone invests their money to help you build a team and get traction, etc. So your bet with destiny is being underwritten by others. You get advisors, board members, and metrics, and essentially spread the thrill of the tumbling balls across however long your runway lasts. The superiority of startups is why young affluent people do them, and why poor people play lotto. The urge to take on risk is what got humans onto ships, rockets, and bathyspheres. It's the unique human ability to reason probabilistically and take a leap, to undertake a calculated risk, and to engage in an exciting dance with destiny. For centuries and in pre-enlightenment times, people believed that all of life was fated and that one's lot was destined from birth. When we appreciate the emotional thrill of risk we start to see that it's part of the glorious awakening of the human sprit birthed in the enlightenment. When a dejected person puts his last quarter into a slot machine, we are not seeing hopelessness, we are seeing hope in its most unfettered form. Even if he loses that person will pick himself up and dust off and be ready to try again, for fate is on his side. This stands in stark contrast with the previous worldview in which the quarter would be saved and a prayer offered up, which has far smaller odds of success than the slot machine.

tetraodonpuffer 11y ago

Spooky23 11y ago

I find it puzzling that the reaction to the lottery here on HN and among many tech people I know is very different to say... fantasy sports betting. With sports betting, not only do you have the prospect of wasting lots of time, but you end up getting hooked to obsessive watching of ESPN and tracking player stats, wasting lots of time. With lotto, I drop $2 and I'm done. Yet the consensus seems to be the the millions of people buying lotto tickets are all rubes, but the folks flouting the law and running bookmaking operations on the internet are disrupting staid government regulation?

djrogers 11y ago
Yeah, but to some people all of the things in your second paragraph are FUN - not a waste of time. Pretty condescending attitude man...
- scrollaway 11y ago
  GP wasn't condescending at all but was merely pointing out how it's condescending and hypocritical to look down on people playing the lottery when the attitude is different wrt sports bets.
  - mason240 11y ago
    They are two very different things though. Even the OP acknowledges that's less about the outcome and more about the experience (which is the opposite for lottos). Cutting right to the more meta part of the discussion, it's just false equivalency constructed that hits both a desire to dump on sports fans and find a way to make an absurdly irresponsible habit practiced mostly by lower income people more palatable.
- TeMPOraL 11y ago
  And so is most of the gambling. Whether poker, roulette or slot machines, a lot of people would tell you they're doing it for the pleasure. But in a way, a lot of things are gambling - up to and including investing, particularly in startups. The desirability of a particular form of gambling in society is tied to the negative effects it has on people (e.g. how easy is it for a player to get addicted), and how exploitative the organizations operating a given game are. Under those metrics, fantasy sports are very much like lottery or one-armed bandit, and very much unlike investing. And hell, it's not just about being condescending to people. I'm perplexed by how people tolerate, and even vocally support companies that intentionally fuck over poor people.

jccalhoun 11y ago

I found this statistic to be the most interesting: "In 1999, researchers at Duke University reported that American households spent an average of $162 per year on lottery tickets, but low-income households spent $289 and those with less than $10,000 in income spent $597. Higher lottery purchases also were associated with lower educational attainment and ethnic minorities." I didn't find the fact that poorer people were more likely to play surprising but just how much more. Nor would I have guessed that the overall average was anywhere near $162 a year. I don't think I've spend that much on the lottery in my 20+ years of being old enough to play the lottery.

pavel_lishin 11y ago
Yeah, it makes me want to look at the numbers. We as a family spend maybe $20; so are there households that are spending tens of thousands?
- knodi123 11y ago
  Perhaps, but I think it more likely that there are tens of thousands that spend a little more than the average. I was shocked the first time I realized how big some lottery-playing communities are, and to what extent it's actually a social activity.
- gozur88 11y ago
  Oh yes. There's a customer at my local 7-11 who spends a couple hundred bucks on every powerball draw. That's a twenty grand over the course of a year, and that's assuming she doesn't play other games. I have no idea how much money she has, but she doesn't spend much on her clothes or car.
  - rosege 11y ago
    get rich or die trying
dwc 11y ago
I think the median numbers (in combination with mean) would be very interesting. I am suspicious that numbers like that are not spread anywhere close to evenly through those demographic groups.

tribune 11y ago

Larger jackpots will sell more tickets. When half the country is buying tickets for a historic jackpot, Powerball (and therefore the States) will take in much more money than if this same jackpot was split over several drawings.

jdmichal 11y ago

It's mentioned that some states were looking at dropping Powerball because the jackpots were won too often and didn't grow big enough to generate excitement. Maybe this points to the fact that people are playing -- and paying -- for the excitement? After all, if your goal was to actually win the jackpot, it seems like you'd be one of the ones playing every week. But there obviously weren't enough of those people to keep the game going.

ck2 11y ago

By the way, as of Wednesday morning, Powerball reports "only" 85% of all number combinations have been sold. So still a 15% chance no-one wins.

georgecmu 11y ago

Off-topic question: Here's a past (yesterday's) submission: https://news.ycombinator.com/item?id=10891465 https://news.ycombinator.com/item?id=10891465 Linked URLs are identical, so how did it pass the 'previously submitted' filter?

bnegreve 11y ago

> Experts aren't entirely sure why "those who can least afford it play the most, Is this that irrational? With 1000 trials, probability of winning at least one time is 3*10^-6 which is low. But what are the odds of becoming a billionaire given that your annual income is below $10,000?

pdabbadabba 11y ago
Assuming that one's goal is to become a billionaire, maybe Powerball is rational for people with low incomes. But is that a rational goal to have? Wouldn't a person be better off prioritizing more modest improvements to one's finances through other strategies with a high probability of success? That being said, not everything in life must be rational. If there are people out there who get a lot out of dreaming of becoming a billionaire and playing Powerball, I have no problem with it. But I do have a problem with governments praying on these aspirations to raise money.
dragontamer 11y ago
> But what are the odds of becoming a billionaire given that your annual income is below $10,000? Much much worse when you're spending all your money on lotto tickets. Its probably not a good idea to try to become a billionare. A millionare is within the realm of possibility, especially if you set your expectations to produce a millionare in your family over the next generation.

mikestew 11y ago

If someone finally wins, the best part will be a temporary moratorium on people who think themselves clever telling me how I won't win. Yes, the odds are clearly published and I can do basic math, but I bought a few tickets anyway. Now shut up about it. Even NPR isn't immune, as evidenced while I listened on the ride to work yesterday. YES, I KNOW!

guelo 11y ago

As a kid in the 80s I wrote a program in Basic to randomly pick lottery numbers and print them as fast as it could and stop when it matched a predefined number. Watching the program spin for hours disabused me of any notion that the lottery could be won. It was a good way to get a feel for the ridiculous odds involved and to this day I've never felt tempted to play the lottery.

clentaminator 11y ago
I also like comparisons to the chances of other things happening as a way to get a feel for the odds, for example you're (apparently) more likely to be killed by a vending machine (1 in 112,000,000), become US president (1 in 10,000,000), or become an astronaut (1 in 12,000,000), than win the powerball. Of course, just because your program never found the right numbers, doesn't mean it couldn't. People do win...
- spaulo12 11y ago
  the chance of becoming POTUS is ridiculous. that chance goes way up if you're a white Christian male lawyer with an Ivy League education, and go way down if you're anything but.
- dtparr 11y ago
  I'm curious about some of those numbers. In particular, it seems unlikely that one is more likely to become US President than an astronaut given that we have an order of magnitude more astronauts than presidents. Are the populations different?

tgb 11y ago

So why didn't they decrease the odds even further? The change of a factor of two or so doesn't seem like much and I don't see a real downside until it actually gets to the point where everyone 'knows' that winning is actually impossible since no one does it.

tgb 11y ago

kaonashi 11y ago

They did this so that the lottery overall was less of a regressive tax on the poor. It's not a rip-off at all, it's actually much fairer. We desperately need something similar with our tax code as a whole.

Mz 11y ago
That may be the result, but that is not why they did it. If you read the article, they did it because sales were down and altering the odds so as to end up with some crazy high jackpot was a known way to get sales back up.
placeybordeaux 11y ago
What do you mean?
- theobon 11y ago
  My guess is that as the pot increases people of a higher income get interested. I can see an argument that if the pot increases from $1M to $10M in likelihood of someone that makes $100k/y buys a ticket will increase by more than 10 times while someone that makes $10k/y wont. Part of it is the hype and part the impact to your life being large enough to override reason. It would be interesting to see if there are any studies that show that trend and where it cuts off.
- Mz 11y ago
  I think the GP means that odds of getting a small win -- i.e. $4 -- went up and odds of winning big went down. So you are more likely to get your money back in small wins. Since poor people play more, they are disproportionately likely to benefit from the increase in small wins, thereby defraying their costs a bit.

corbinpage 11y ago

Personally, I see the lottery as an opt-in tax on hope geared towards the poor.

dmerrick 11y ago
I've always thought of it as a tax on people who are bad at math.

sleepychu 11y ago

How on earth have they arrived at odds which aren't an integer result for a lottery? http://www.trbimg.com/img-56954025/turbine/la-fi-mh-powerball-rules-were-tweaked-20160112-002/750/750x422 http://www.trbimg.com/img-56954025/turbine/la-fi-mh-powerbal...

scottmsul 11y ago
Not only do you have match n numbers, you must also not match n+1, n+2, etc., otherwise you win a different prize.
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mcintyre1994 11y ago

This is interesting because the UK lottery made a very similar change, with the same effect - higher odds of winning any prize, lower odds of winning. They also doubled the entry price to £2. They changed the numbers to choose from 1-49 to 1-59, and added a prize for matching any 2 (apparently 1 in 10.3 odds) of a free lucky dip (ie another play). It'd be interesting to know the distribution of people's picks now - I know that my parents use the same numbers they always have, all in the 1-49 range. Obviously lucky dips are more fair, I'm not sure which is more common though.

dsp1234 11y ago

(all of this is based on an idea from another poster in a different thread, which I cannot find at the moment) odds of winning: 1 in 292,200,000 (approx) miles between LA and NYC: 2,800 (approx) feet in a mile: 5,280 inches in a foot: 12 US dimes in an inch: 1.4 (approx) 2800 miles * 5280 feet * 12 inches * 1.4 dimes = 248,371,200 "dimes" between LA and NYC Summary: Assume that someone drove from LA to NYC at stopped at any point of their choosing along the way and threw a dime onto the ground. Starting from LA you drive the same route, you have better odds of stopping your car at the exact spot that that person dropped their dime than you do of winning this Jackpot. With all the usual caveats about not being evenly distributed. I find this a little easier to explain to people, such that they can reasonably understand that it's not just "unlikely". Stuff like 10 times as likely to be hit by a meteorite or other super rare events just doesn't seem to get the point across as well. It's also easier to break it down into smaller pieces (throw dimes on the ground and have people try to pick the right one, guess a mile marker just in Colorado, etc)

choward 11y ago
For people who care more about their units: 2800 miles/distance_between_LA_and_New York * 5280 feet/mile * 12 inches/feet * 1.4 dimes/inch = 248,371,200 dimes/distance_between_LA_and_NYC
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ratsmack 11y ago
People go to casino's every day and for every winner there is a looser, and in the middle the house takes a cut. The Lottery is no different except that the pot is a little larger as in the case of Powerball. It is entertainment pure and simple, so if someone spends $200 per year entertaining themselves, I can't see a problem with it. The -odds- are that someone is going to win, and if you don't play at all, it is impossible to win.
- vlunkr 11y ago

emehrkay 11y ago

I spent almost 300k in that simulator and only won ~7k. I thought I'd hit big. I still put up 2 bucks for tonight though :( Anyway, the cheeky FAQ on the PowerBall site is worth money down the drain http://www.powerball.com/pb_contact.asp#odds http://www.powerball.com/pb_contact.asp#odds