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Am I missing something here? Are these lotteries +EV in the first place? How does the lottery expect to make money if that is the case?
by kulach 3y ago
Am I missing something here? Are these lotteries +EV in the first place? How does the lottery expect to make money if that is the case?
- devilbunny 3y agoThey're not, generally, but if the stars align correctly, nobody will win the jackpot until it's gotten so large that buying every possible combination will - if you're the only winner - pay you more than the base odds. But then you're betting that you will have the only winning ticket. I'll usually buy a few tickets if it hits that point. Cheap fantasy.
- criddell 3y agoThe recent Powerball lottery prize was for $1 billion but there are fewer than 300,000,000 possible tickets. But like somebody else mentioned, there's always the possibility of multiple winners. For the recent billion dollar prize, a single person won. The prizes get huge because when there's no winner, the prize rolls over to the next drawing.
- mattficke 3y agoThey’re progressive jackpots, the prize pool increases until someone wins, at which point it resets. So a ticket for an individual drawing can be +EV if no one has won in a while, with the excess money coming from players in previous games rather than the lottery administrator.
- d1sxeyes 3y agoThat would be true if each combination could only be bought once. However, as you cannot know in advance how many other players will play, or what numbers they will select, you cannot properly calculate an EV. Further, lottery players rarely play randomly. A winning combination made up exclusively of numbers less than 31 has a higher chance that someone else will have the same numbers (as many people use birthdays to pick the numbers they will play).
- soneil 3y agoWe call this "roll-over", when no-one wins so the pot accumulates. This week's draw doesn't need to be profitable, the overall scheme needs to be profitable. Say $2MM in tickets are sold, putting $1MM in the pot. And no-one wins. So next week, $2MM in tickets are sold, putting $1MM in the pot - which already contained $1MM from last week. Continue this over a few weeks. After 5 weeks you have $5MM in the pot - and another $5MM in profits. On week 5, $2MM in tickets could buy $5MM in winnings, but that doesn't mean the scheme is negative. It just means this week's draw looks like a good deal. States love lotteries because the house cannot lose - their share is taken before it goes in the pot, so the pot is never a liability.
- abwizz 3y ago> Say $2MM in tickets are sold what do you think about the format: [scalar] [si-prefix] [unit]
- soneil 3y agoHonestly, I prefer it. But for one reason or another, MM is the accepted suffix when dealing with money (it comes from mille in latin meaning thousand, not million.)
- abwizz 3y agothx any idea how it came to prominence? i guess i has something to do with distancing the field from natural sciences.
- bruce343434 3y ago2 megadollars? Sure, it still beats what my reading voice calls "mumums"
- abwizz 3y agoyea, if we can have mebibytes on our home turf, we should be able to have megadollars in meatspace
- jeffbradberry 3y agoThere is a fixed probability of matching all numbers but the value of doing so varies, so sometimes the EV can be positive.