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While I support the idea that lottery and gambling is for 'entertainment purposes only', if one never buys into the lottery, they can never obtain the winnings.

While I support the idea that lottery and gambling is for 'entertainment purposes only', if one never buys into the lottery, they can never obtain the winnings. Buying exactly one ticket per drawing at least places one in the pool of potential winners, despite the odds being rather long. Although the expected value is still minuscule, it's an unquantifiable improvement (since we can't divide by zero). And before you evoke any comparisons with the probabilities of getting struck by lightning or hit by meteors, none of those will ever pay you a nice chunk of cash. Investing the same amount of money in a financial device with higher assurances of returns is not a comparable experience, neither psychologically nor practically, even if we callously suppose that such instruments are in fact widely available across all cross-sections of society. Holding back the price of 1 ticket per drawing period from safer investments to gain a shot at a high-payout lottery is simply diversifying your investment portfolio.

throwawaywonk 9y ago
Actually, given the probability of winning, each lottery ticket has a negative value, so... yeah, there's no way it isn't a waste of money. "You gotta be in it to win it" is nonsense and is exactly what the lottery commission relies on.
gnopgnip 9y ago
It is a negative expected value. You can go below zero. There is no situation where buying lottery tickets is a good way to diversify your portfolio
- slavik81 9y ago
  Well, there are some situations in which it's a good investment. http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/ http://newsfeed.time.com/2012/08/07/how-mit-students-scammed...
- Domenic_S 9y ago
  Nah, depending on jackpot size, Mega Millions at least can reach a +ev state. https://seekingalpha.com/instablog/957061-chris-demuth-jr/2505021-a-ev-lottery https://seekingalpha.com/instablog/957061-chris-demuth-jr/25...
kibwen 9y ago
> Although the expected value is still minuscule, it's an unquantifiable improvement (since we can't divide by zero). This isn't how it works, because the expected value, in monetary terms, is negative once you factor in the cost of the tickets. Statistically, it is a quantifiable unimprovement. That said, lots of activities have negative expected monetary value, like going to the movies, or going bowling. And it is theoretically possible that you will find an envelope in the bowling alley parking lot containing a million dollars, but let's not pretend that both bowling and playing the lottery are anything other than entertainment products at the end of the day.
- humanrebar 9y ago
  > Statistically, it is a quantifiable unimprovement. What's the probability that someone on SSI will be a millionaire before they die? What's the probability that someone will become a millionaire by playing the lottery? Which is a larger probability? It's possible that many people aren't as dumb as we think.
  - finiter 9y ago
    Could I interest you in a bridge? Probability being on SSI makes you a millionaire: 0% Probability playing the lottery makes you a millionaire: Very close to 0%. Probability being on SSI makes you poorer: 0% Probability playing the lottery makes you poorer: Very close to 100%.
- mrb 9y ago
  > This isn't how it works, because the expected value, in monetary terms, is negative... I once heard a statistics professor explaining he played the lottery. His reason? It was fun. Period. He said one may spend $10 on a movie ticket and be entertained for a few hours, but one would end up $10 poorer with 100% certainty. On the other hand when he spent $10 on a lottery ticket he was entertained for days just thinking of the possibility of winning, and he might end up a lot richer, but it was not a necessary condition for him to enjoy the fun it provides.
  - 9y ago
AcerbicZero 9y ago
I think the problem people have with the lottery isn't directed at the middle class person buying a lottery ticket here and there. It's more that the whole system is designed to encourage already vulnerable people to risk somewhat significant portions of their weekly take home on the extremely unlikely chance of winning, and then doing this week in and week out. $2/$3 for a Powerball, maybe a state lotto ticket, then a few scratch offs, and ATM fees to get the cash for all this, and poof you've spent $10-$20+, when you're living on less than $300 a week. I'm not saying don't buy a lottery ticket here and there if you truly get some enjoyment out of it, but the lottery system as it is now seems to encourage borderline gambling addiction behaviors in people who are the least likely to be able to resist them.
- icebraining 9y ago
  Spain in the 19th century tried to avoid that by massively increasing the ticket price (even now, it's still 200€ per full ticket). It didn't work, people just pooled their money and bought "shares" of a ticket.
  - gertef 9y ago
    http://99percentinvisible.org/episode/el-gordo/ http://99percentinvisible.org/episode/el-gordo/ great story
rdtsc 9y ago
Ok if the goal is to give people hope, just allocate a fund every 3 months from the state and enter everyone who is reported a tax income less than poverty level in the pool. And there it is, automatic hope and dreams for a while for all that state's poor. The lottery though is not hurting a middle class programmer who buys a ticket for fun, it is hurting the poor who possibly don't realize how unlikely it for them to win and _time_ and money spend on the lottery might be better used for something else. It is not unlike the liquor stores and payday loans popping up in more poorer areas of town. From a cold rational point of view one can say "ok, if they rely on the lottery to give them hope, they are just as likely to spend that money on drugs or alcohol" and indeed they might however it doesn't mean the states should encourage that and act in a predatory manner towards them.
- paulie_a 9y ago
  I've recently moved to Chicago and two things I have noticed: what I can only assume are relatively lower income people buying incredible amounts of lottery tickets, expensive scratch offs at that. And chicken wing bones one the sidewalks.
anonacct37 9y ago
The expected return is not minuscule. It's a reasonably sized negative number.
deleted 9y ago
[deleted]

throwawaywonk 9y ago

Actually, given the probability of winning, each lottery ticket has a negative value, so... yeah, there's no way it isn't a waste of money. "You gotta be in it to win it" is nonsense and is exactly what the lottery commission relies on.

gnopgnip 9y ago

It is a negative expected value. You can go below zero. There is no situation where buying lottery tickets is a good way to diversify your portfolio

slavik81 9y ago
Well, there are some situations in which it's a good investment. http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/ http://newsfeed.time.com/2012/08/07/how-mit-students-scammed...
Domenic_S 9y ago
Nah, depending on jackpot size, Mega Millions at least can reach a +ev state. https://seekingalpha.com/instablog/957061-chris-demuth-jr/2505021-a-ev-lottery https://seekingalpha.com/instablog/957061-chris-demuth-jr/25...

kibwen 9y ago

> Although the expected value is still minuscule, it's an unquantifiable improvement (since we can't divide by zero). This isn't how it works, because the expected value, in monetary terms, is negative once you factor in the cost of the tickets. Statistically, it is a quantifiable unimprovement. That said, lots of activities have negative expected monetary value, like going to the movies, or going bowling. And it is theoretically possible that you will find an envelope in the bowling alley parking lot containing a million dollars, but let's not pretend that both bowling and playing the lottery are anything other than entertainment products at the end of the day.

humanrebar 9y ago
> Statistically, it is a quantifiable unimprovement. What's the probability that someone on SSI will be a millionaire before they die? What's the probability that someone will become a millionaire by playing the lottery? Which is a larger probability? It's possible that many people aren't as dumb as we think.
- finiter 9y ago
  Could I interest you in a bridge? Probability being on SSI makes you a millionaire: 0% Probability playing the lottery makes you a millionaire: Very close to 0%. Probability being on SSI makes you poorer: 0% Probability playing the lottery makes you poorer: Very close to 100%.
mrb 9y ago
> This isn't how it works, because the expected value, in monetary terms, is negative... I once heard a statistics professor explaining he played the lottery. His reason? It was fun. Period. He said one may spend $10 on a movie ticket and be entertained for a few hours, but one would end up $10 poorer with 100% certainty. On the other hand when he spent $10 on a lottery ticket he was entertained for days just thinking of the possibility of winning, and he might end up a lot richer, but it was not a necessary condition for him to enjoy the fun it provides.
- 9y ago

AcerbicZero 9y ago

I think the problem people have with the lottery isn't directed at the middle class person buying a lottery ticket here and there. It's more that the whole system is designed to encourage already vulnerable people to risk somewhat significant portions of their weekly take home on the extremely unlikely chance of winning, and then doing this week in and week out. $2/$3 for a Powerball, maybe a state lotto ticket, then a few scratch offs, and ATM fees to get the cash for all this, and poof you've spent $10-$20+, when you're living on less than $300 a week. I'm not saying don't buy a lottery ticket here and there if you truly get some enjoyment out of it, but the lottery system as it is now seems to encourage borderline gambling addiction behaviors in people who are the least likely to be able to resist them.

icebraining 9y ago
Spain in the 19th century tried to avoid that by massively increasing the ticket price (even now, it's still 200€ per full ticket). It didn't work, people just pooled their money and bought "shares" of a ticket.
- gertef 9y ago
  http://99percentinvisible.org/episode/el-gordo/ http://99percentinvisible.org/episode/el-gordo/ great story

rdtsc 9y ago

Ok if the goal is to give people hope, just allocate a fund every 3 months from the state and enter everyone who is reported a tax income less than poverty level in the pool. And there it is, automatic hope and dreams for a while for all that state's poor. The lottery though is not hurting a middle class programmer who buys a ticket for fun, it is hurting the poor who possibly don't realize how unlikely it for them to win and _time_ and money spend on the lottery might be better used for something else. It is not unlike the liquor stores and payday loans popping up in more poorer areas of town. From a cold rational point of view one can say "ok, if they rely on the lottery to give them hope, they are just as likely to spend that money on drugs or alcohol" and indeed they might however it doesn't mean the states should encourage that and act in a predatory manner towards them.

paulie_a 9y ago
I've recently moved to Chicago and two things I have noticed: what I can only assume are relatively lower income people buying incredible amounts of lottery tickets, expensive scratch offs at that. And chicken wing bones one the sidewalks.

anonacct37 9y ago

The expected return is not minuscule. It's a reasonably sized negative number.

deleted 9y ago

[deleted]