Mega Millions

[Contingency Plan]

Originally Posted by BC2012

I didn't know there were partial payouts (I've never actually played the lottery). And, true, the tax implications certainly affect the EV.

Not to mention diminishing returns.

 

[deadly7]

Originally Posted by Fraiche

Did you and Aaron take math courses sponsered by Arthur Anderson?

Nobody is arguing that 1/100M > 0/100M mathematically.

 

[MrG]

Originally Posted by otc

Your statistics must not be that great since the expected value was actually a good deal less than 1. Once you factor in the fact that the lump sum payout is only 200 some million and that taxes are going to eat a lot of it...I'd put it closer to 60 cents (factoring in all of the payouts...like the $2 for matching the last ball). Of course as an occasional thing, it isn't hard to suggest that each ticket is worth 40 cents of enjoyment.

The real key to maximizing your returns is to not pick the same numbers as anyone else. This means that the Lost numbers would be a terrible idea, as would any common sequences (1 2 3 4, common dates, etc). All numbers have an equal chance of winning...but what happens when you find out that 2000 people also used the lost numbers?

EDIT: Actually It would really suck if 2000 people chose the same number...the payout would be less than if you you had picked only the first balls right and gotten the last one wrong

My statistics abilities are fine. To be honest, I wasn't particularly worried about the exact nuance of it all. The expected value, when calculated using the probability of a single play hitting a $355 million jackpot, is well over the one dollar it cost to buy a ticket. This remains true on the annuity option even after income taxes (assuming the top marginal rate stays the same for the life of the annuity).

I've never sat down and worked numbers that include every possible eventuality, so I don't have any reason to doubt that you're correct on the impact of taking the lump sum on EV. However, in the simple terms of total jackpot and taxes, my statement on EV in my first post is correct.

 

[Fraiche]

Originally Posted by deadly7

Nobody is arguing that 1/100M > 0/100M mathematically.

That is correct. Great observation.

 

[upstarter]

I once asked the cashier at my liquore store what's the most amount of money he's seen people spend on the mega millions. He said, "when it gets over 100 million, lots of people that normally spend $15 dollars per draw routinely spend $100. When it's over $300 million, there are quite a few people that then spend $500 per draw."

I like playing for fun, but the above is pathetic. The worst was I pulled up to a 7-11 and got out of the car with the intention of spending $1 during my lunch break. I realized I didn't have cash (and you can only buy lotto with cash) so I got back in the car and drove off because I'm not gonna spend $5 on ATM fees to pay the lotto.

That night, before I go to bed, I check the numbers just out of curiosity and the the winning ticket for $7 million was sold at the 7-11 I was about to buy the ticket from. So my chances went from 1 in 40 million to about 1 in maybe 5,000. I wonder if it would've been me sometimes...

 

[Don Carlos]

Well, guys, I just want to report that I did not succeed at winning the mega millions this time around.

 

[texas_jack]

ITT people who waste their money

 

[eztantz]

Originally Posted by texas_jack

ITT people who waste their money

More like:

ITT - Poor people.

 

[Bhowie]

Originally Posted by eztantz

More like:

ITT - Poor people.

lol, you just owned yourself, cus u in this thread.

 

[rnoldh]

Originally Posted by upstarter

That night, before I go to bed, I check the numbers just out of curiosity and the the winning ticket for $7 million was sold at the 7-11 I was about to buy the ticket from. So my chances went from 1 in 40 million to about 1 in maybe 5,000. I wonder if it would've been me sometimes...

You cudda been a contenda!

 

[saiyar1]

Originally Posted by sharwood

odds does not equal probability. I don't really care what the odds are. Out of curiosity, does anybody know what the true probability of hitting jackpot is?

Simply 1 / (1 + 176million)

...pretty much exactly what the odds are since they are so small.

 

[Tokyo Slim]

WA winners got 91 Million. Not a bad haul. They don't look that poor, I think the dude is a retired Boeing worker.

 

[milosz]

I smoke, I drink, I buy books by the load, I wear $275 denim, I gamble on sports and I spend time at the craps table in Vegas.

The $20 I spent on MegaMillions wasn't a rational act, it was a gamble.

 

[GSquared]

Originally Posted by BC2012

Odds of winning the Mega Millions is 1 in 176 million, according to the news.

$355/176 = $2.01. Buy 2 tickets and its still worthwhile from an expected value point-of-view, I guess.

Me and my friend argue about this all the time. He's a finance professor. He states that this is all BS. The reasoning behind it is that there isn't going to be a guaranteed winner at the 355 Million mark. (Evidence: nobody has won for the previous month that has allowed it to get that high.) If on the other hand you were to buy every single combination, then it would be worth it for you to do, since you would be spending 176 million to win 355 million. The problem he exists when you take into account taxes and also other winners. In this drawing 2 people won and split the whole prize pool. If you bought every combination and someone else won (or multiple people did), you'd be screwed.

Personally, I buy $2-5 worth when it gets over $100 million. For the chance.

 

[in stitches]

Originally Posted by Connemara

People who play the lotto on a regular basis are usually uneducated and of the lower class.

Originally Posted by SkinnyGoomba

I personally believe the 'Mega Millions' to be irresponsible, most of the winners are poor or lower middle class who end up completely destroying their lives and the lives of their families.

as someone who worked in a pawn shop for a number of years the reason behind this i think is that people who who make a decent living usualy have some sort of savings or retirement plan and therefor the lottery is a pipe dream a fantasy that would be nice and if the jackpot gets high enough you may grab a ticket but for the most part it is out of sight out of mind

for the above mentioned classes the lottery is their retirement plan it is their way out, it is the though that for some keeps them going. i have peronaly seen countless people come to cash their welfare checks, a meager $500 a month or so that is their entire source of income who buy $50+ on lottery tickets, %10 of their entire income do you know anyone making 100k spending 10 grand on lottery tickets?

because they spend the most money on lottery tickets statistically its no surprise they win the most. the lottery is not irresponsible, many of the winners who dont know what do with the money get abused by the hundreds of relatives and con artists out there who are banging their door down, others are irresponsible and many go on to lead happy lives that never make the news so we forget about it

i wish i had won