PowerBall and other Lottery Related issues

[jimbogumbo]

Some might say the Doritos are worse for you than giving your money away.

I'm the same as secundem. I am not one of the poor who get suckered in buying multiple tickets throughout the year, and don't feel any economic pain from it.

FWIW, if you play and pick numbers pick a bunch of primes and/or numbers greater than 31. That way you maximize your expected (less negative) return.

[Vkw10]

I buy a multi-draw ticket occasionally. One number, good for the next ten draws. I'm an efficient lottery player.

[kaysixteen]

Doritos will just get me fat.  Of course, I am already fairly plump.   Bought a bag at Cumby's just last week.

I am likely not gonna buy a PB ticket, but the thought of becoming a 'billionaire' is intriguing.   I do know what I would do with the money-- buy a nice piece of rural land somewhere, say 100 acres or so, and build a Christian study center, essentially a place to take non-credit courses available to all adults, listen to lectures, run a publishing ministry, etc.   One can dream.

[clean]

NO WINNER!! 

Now 1.5 Billion!

Buying a ticket now? 
It is a lot closer to being a fair/even money bet now! 

[marshwiggle]

NO WINNER!! 

Now 1.5 Billion!

Buying a ticket now? 
It is a lot closer to being a fair/even money bet now!

My understanding is that lotteries generally only pay out less than 50% of what they take in. So, if you mean that buying a million tickets now is more likely to result in closer to 1/2 million dollars in prize money, that may be right, but buying a single (or a few) isn't likely to pay out significantly more than before. (Unless there are more lower level prizes that accumulate as well.)

[clean]

The odds of winning are 1 in 292 Million.  The payoff is now 745.9Million cash value.  so on paper, (without taxes) you could  start running the machines to print 292 million tickets, pay $2 each, and still make money! 

The risks of that strategy are:
1. Taxes will reduce payoff.
2.  there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.

[jimbogumbo]

The odds of winning are 1 in 292 Million.  The payoff is now 745.9Million cash value.  so on paper, (without taxes) you could  start running the machines to print 292 million tickets, pay $2 each, and still make money! 

The risks of that strategy are:
1. Taxes will reduce payoff.
2.  there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.

Although maybe not with Powerball, I seem to remember an Australian group did this once.

[dismalist]

People's decisions about gambling and insurance do not depend on expected values of the payoffs of risk taking, but on expected pains and gains of payoffs.

Some risk I am confronted with by nature [house burns down]. I have no choice but to accept the risk.  I am willing to insure even though I have to pay an insurance premium which must cover the insurance company's administrative cost, which makes it an unfair gamble. Premium makes me worse off with certainty. The expected monetary gain is less than the certain premium payments. But there is little pain in paying the premium compared to the pain of having my house burn down.

Voluntarily accepting risk in the form of buying a lottery ticket -- even while you insure your house -- is a result of your feeling little pain for the certain price of the lottery ticket and lots of gain from receiving $X billion times a small probability = lots of gain.

Money isn't everything: Pain and pleasure are! :-)

[onthefringe]

The odds of winning are 1 in 292 Million.  The payoff is now 745.9Million cash value.  so on paper, (without taxes) you could  start running the machines to print 292 million tickets, pay $2 each, and still make money! 

The risks of that strategy are:
1. Taxes will reduce payoff.
2.  there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.

Although maybe not with Powerball, I seem to remember an Australian group did this once.

There were several groups including a Michigan couple and some MIT students who sort of pulled this off with a game called Winfall

[jimbogumbo]

The odds of winning are 1 in 292 Million.  The payoff is now 745.9Million cash value.  so on paper, (without taxes) you could  start running the machines to print 292 million tickets, pay $2 each, and still make money! 

The risks of that strategy are:
1. Taxes will reduce payoff.
2.  there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.

Although maybe not with Powerball, I seem to remember an Australian group did this once.

There were several groups including a Michigan couple and some MIT students who sort of pulled this off with a game called Winfall

Yeah, the Michigan story is a great one. A triumph of math thinkery!!

Here's the story on the Australian one. They failed in their attempt.
https://money.cnn.com/2016/01/11/news/powerball-jackpot-win-guarantee/index.html

[Parasaurolophus]

I'm entirely with mamselle here. No. Lotteries, as they're structured, are a net drain on the world's store of happiness.

[jimbogumbo]

Let me be clear: I don't think government should be in the lottery business. It's an example of bad public policy. I cannot stop it, however, and occasionally play for the reasons stated above.

[dismalist]

Lotteries, as they're structured, are a net drain on the world's store of happiness.

As they're structured, maybe, but maybe not. Virtually all people who gamble are having fun. They feel like doing it, and they harm no one. Let's not be against fun.

There are people who are addicted to gambling, just like there are people who are addicted to heroin. Their problem is that they spend virtually all of their income on the addiction.

I've seen a lovely structure for gambling slots that deter putting all one's cash into the machines: The slots take a long, long time to determine winnings. That's an example of a regulation in a far away country, where the slots are ubiquitous in bars, that makes sense. What's going on is that the expected payoff per unit time is being reduced. That takes some fun out of gambling.

We could still have Las Vegas, but put up a sign that reads: Abandon hope all ye who enter here.

Very few people actually suffer from gambling addiction. Trying to stop gambling to prevent them from hurting themselves deprives many, many others of lots of fun. And if we did, the industry would move underground -- we'd have expenses on violence and profits instead of tax revenue.

Let me be clear: I don't think government should be in the lottery business. It's an example of bad public policy. I cannot stop it, however, and occasionally play for the reasons stated above.

As with marijuana and other drugs, tax and regulate, regulate and tax. Just legalize gambling! Competition will keep profit margins low. Government can still collect tax revenue without operating the vice dens. Otherwise the Mafia will do it for us.

ETA: The last bit.

[Hegemony]

I think, then, we're talking about two different types of people. One type pays their $3 for their lottery ticket and their $3 buys them a nice daydream about what they would do with their millions. And when they don't win, they say, "Well, it was fun having the dream!" And possibly, "That was fun, gonna do this again sometime!"

The second type, if somehow they end up buying a ticket, say something like, "I think I have paid $3 for a pipe dream, and I bet I have wasted my money. It's all kind of a swindle, getting people to fork over their money for nothing. You can bet I've got better uses for my dollars, and I won't waste money again if I can help it."

The second type has had less fun. But enough decisions of this nature and the second type is going to end up with a bigger nest egg than the first type.

Some affluent people may well play the lottery for their $3 shot of fun. All the people I know who play it frequently, however, are people who make a habit of frittering away money in multiple small but ultimately consequential ways, and who are strapped as a result. Playing the lottery may be fun for them, but being hard up is not so much fun. And all of their little decisions are so small that they say "But it's only a $3 ticket! But it's only a [small expense here, small expense there, several dozen small expenses, end result poverty]." Kinda like cigarettes. One won't kill you, but a lifetime of them ...

[kaysixteen]

Hmmm... there is a diff between the degenerate gambler who embezzles large quantities of cash from his employer in order to feed his habit, vs. the small-time problem gambler who spends $100+ a week on scratchies, or other such types of gambling.   Most of the latter do not have the 100 bucks to lose, and they and their families do without of a lot of stuff they actually need, in order to feed this small-time addiction.

Another issue with ascertaining who is a compulsive gambler/ problem gambler, and how many people qualify thereas, would be, ahem, getting people to fess up to being such.   How do you know your stats are accurate?