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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

by 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.
    - bryanlarsen 11y ago
      It has nothing to do with the secondary prizes, at least for Canadian 6/49. Most of those are fixed value, so are a increasingly small ratio of total payout as the jackpot goes up. It's because of those people who bought tickets in the many preceding weeks when there wasn't any winners. Those tickets are contributing to the jackpot, but have exactly 0% chance of winning, increasing the odds of the tickets for the current week.
reverend_gonzo 11y ago
While it's technically +EV numerically, it's not really +EV functionally, due to the high variance / extremely low odds and the value of a dollar when you have none vs the value of a dollar when you have half a billion. At +EV, it would mean, if I put in $60,000, I would expect to get more than $60,000 back, and on average that's correct, though odds are still that the $60k will go to waste. Furthermore, after the first $100 million, the next $100 million isn't really going to change much in utility, and each dollar becomes worth less as you go further out, so at odds of 1 in 200m, it doesn't really pay off unless you already have the $200m to place the bet. When you take into account that the pot might get split with multiple winners, that's a massive risk you take. I don't think this is really viable until you have odds of 1 in 5 or 10 million with +EV, but at that point, you've got multiple people, hedge funds, etc, that can get together and buy the winnings.

by jfoutz 11y ago

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.
  - bryanlarsen 11y ago
    It has nothing to do with the secondary prizes, at least for Canadian 6/49. Most of those are fixed value, so are a increasingly small ratio of total payout as the jackpot goes up. It's because of those people who bought tickets in the many preceding weeks when there wasn't any winners. Those tickets are contributing to the jackpot, but have exactly 0% chance of winning, increasing the odds of the tickets for the current week.

reverend_gonzo 11y ago

While it's technically +EV numerically, it's not really +EV functionally, due to the high variance / extremely low odds and the value of a dollar when you have none vs the value of a dollar when you have half a billion. At +EV, it would mean, if I put in $60,000, I would expect to get more than $60,000 back, and on average that's correct, though odds are still that the $60k will go to waste. Furthermore, after the first $100 million, the next $100 million isn't really going to change much in utility, and each dollar becomes worth less as you go further out, so at odds of 1 in 200m, it doesn't really pay off unless you already have the $200m to place the bet. When you take into account that the pot might get split with multiple winners, that's a massive risk you take. I don't think this is really viable until you have odds of 1 in 5 or 10 million with +EV, but at that point, you've got multiple people, hedge funds, etc, that can get together and buy the winnings.