Odds Behind the Line?

Quote: ncfatcat

Since the odds of winning the Powerball Lottery are 173,000,000 to 1 (app) I won't buy a ticket unless the payoff is more than $173,000,000.

I'll play it if I am in the mood for a lottery gamble, else not.
To say that winning $100,000,000 is a bad win, but $173,000,000 is a good value win is a bit ridiculous for the one who is the winner - and a ticket is a shot at winning, albeit a small one. Some guy who makes $8 an hour working at a 7-11 hits the One hundred million jackpot will say that it is just as fine as winning $173,000,000. Once the payout become a truly life-changing event, winning the jackpot amount becomes a simple boolean event: A fortune is great - and not winning is not so great.

The effect of HE is greater on small sessions, as playing the odds might mean the difference of leaving ahead $50, versus down $50. Steak versus sandwiches.

Quote: Paigowdan

To say that winning $100,000,000 is a bad win, but $173,000,000 is a good value win is a bit ridiculous for the one who is the winner.

That reminds me of this NY Lotto commercial where a couple sees money falling from the sky, but the husband is reluctant to run out and get some, because it's not that much...

Well you also have to consider the cash vs the annuity payout and the almost 50% Federal and State tax hit (unless you live in a State like TN. FL or DE with no State Income Tax) That is interesting though. What would be a "fair" bet considering the less than jackpot payoffs available?

You're right that the odds "don't matter" in terms of expected loss. However, taking odds reduces the effect of the house edge on total money bet. If you are going to gamble anyway, you should get as much of your action on the "free" bet as possible. That's why large odds multiples are so desirable. You can press your action without increasing your expected loss.