Powerball at $550 Million
Quote: FaceI’m with Mrs. Wiz on this one. Yes, buying a ticket is probably going to be worthless. But it costs, what, $5? How much entertainment does a $5 Pass Line get you? A few seconds / minutes? A lotto ticket at least gives you hours if not days to dream, dreams that often show you where your heart is pointed. I wouldn’t do it every day / week, but sometimes a reminder of what your heart wants is worth the $5.
Apparently my heart wants to own an NBA team.
Quote: WizardWouldn't it be ironic if I, the one always trying to ruin everybody's fun with how lousy a bet the lottery is, won the Powerball?
It would be sinful, actually. So if you win, you'd better give me your share the money so I can get it purified ;)
Quote:As usual, whenever the jackpot gets big enough for the local media to report on the long lines to buy tickets in Primm, my wife gets excited and wants to play. We had the exact same debate this morning we've had many times before. My mathematical explanations about how a $2 ticket has a value of 90 cents. Her argument is simply "you have to be in it to win it."
Don't take this the wrong way, but what possible benefit or value do you see in arguing with your wife over a matter of ten dollars?
Quote: WizardI prefer to use the Poisson distribution instead when such huge numbers are involved. I think a lot of calculators would freeze up on that calculation. If we assume 184M tickets sold, then the expected number of winners is 184000000/175223510 = 1.05. The probability of zero winners, with a mean of 1.05, is e^-1.0500874 = 0.359907, which is very close to your number.
To update, the jackpot is 600M now. I assume 307M in tickets sold, for 1.75 winners. Probability of no winner = 17.4%.
Eh, the default calculator on Windows can handle it. :)
But if you think 307M tickets are sold, shouldn't the jackpot be significantly higher than $600M annuity? The cash option of the jackpot should go up by about 70c per ticket since each ticket is $2, right?.
Since the previous draw had a cash option of $229.2M, then 307M tickets sold would lead to a cash option closer to $444.1M, which is significantly more than $600M annuity ($376.9M cash). It's possible I'm missing something though.
The jackpot having returned to its starting value of $40 million, paid over 29 years. For this, the cash option pays $25.1 million. This reflects an annual yield of 1.6% - invested in a decent mutual fund, if you haven't done better than that after thirty years, you've got bigger things to worry about than your lottery winnings. Granted, it means a level of discipline, but if it were back into nine figures, I'm pretty sure I could manage. (And yes, between the capital gains of the years and the fact that you're paying more into the top bracket, Uncle Sam would get more, but capital gains tax is only 15%, and we're still talking a seven or eight-figure annuity.)
Quote: sodawatera winning ticket was sold in florida. so no billion-dollar jackpot this time.
Damn. I had powerballs of 10 and 12, not 11 though...ugh And sick that it's a sole winner. Biggest sole winning ticket I believe. Roughly 242M tickets sold, so the chaotic rollover chance was still about 25%. Yikes.
Quote: tringlomaneDamn. I had powerballs of 10 and 12, not 11 though...ugh And sick that it's a sole winner. Biggest sole winning ticket I believe. Roughly 242M tickets sold, so the chaotic rollover chance was still about 25%. Yikes.
Only 242 million? When Mega Millions hit half a billion last year, didn't over a billion tickets sell?
(Besides, don't the numbers cluster? It's why it's better to get a quick pick, or at least go to random.org if you don't trust them...)
Quote: 24BingoOnly 242 million? When Mega Millions hit half a billion last year, didn't over a billion tickets sell?
(Besides, don't the numbers cluster? It's why it's better to get a quick pick, or at least go to random.org if you don't trust them...)
Over all the rollover draws ticket sales were over a billion for the Mega Millions draw. The last draw, it wasn't over a million either. Numbers may cluster a bit via birthdays etc. but I'm not sure how much of an effect it is. About 70% of picks are quick picks historically, iirc.
I got the 242M number by taking the number of prize winners and multiplying by the inverse probability of winning any prize (31.85).
Quote: tringlomaneBut if you think 307M tickets are sold, shouldn't the jackpot be significantly higher than $600M annuity? The cash option of the jackpot should go up by about 70c per ticket since each ticket is $2, right?.
According to lottoreport.com, the last drawing had 232,268,274 tickets sold. So, my estimate of 307M was obviously too high. It was largely based on the fact that that 11/28/12 drawing had a jackpot of $425 million and 281,565,987 in ticket sales. So, this week we had a jackpot 39% larger (according to Lottoreport yesterday's jackpot was 590.5M), but 18% less tickets sales. I'd like to compliment America for buying fewer tickets. Hopefully, I had something to do with that.
In case anybody cares, my updated demand formula for the number of tickets sold (in millions) is 10.086*e^(0.0059*j), where j is the jackpot size in millions.
There is not a direct relationship between jackpot increase and tickets sold. It seems that prize money for the smaller wins comes out of the jackpot. On average, 85 cents from each ticket sold goes into jackpot growth. However, the figure ranges everywhere form $0.55 to $1.03. I tend to think that when the jackpot is small more money is held back to a secret reseeding fund. By the way, when I refer to jackpot amounts, I mean the annuity jackpot, not the lump sum option.
I hope this answers the question.
Quote: NareedDon't take this the wrong way, but what possible benefit or value do you see in arguing with your wife over a matter of ten dollars?
It is a matter of principle. She may as well reach into my wallet and burn a $20 bill in front of my face. It is half her money, but I'm not going to let it go without an objection being raised.
Quote: tringlomane(175,223,509/175,223,510)^184,080,000 = 0.34975
The Wizard cites Poisson Distribution for his calculation. I am not disputing his argument, I just think I can explain it in a simple manner.
Use A to mean ANSWER
A == (1+x)^n
ln(A) = n*ln(1+x)
Now for very small values of x, ln(1+x) approaches x .
ln(A) is approximately n*x
A is approximately exp(n*x)
A=(175,223,509/175,223,510)^184,080,000
A=(175,223,510/175,223,509)^(-184,080,000) invert fraction
A=(1+1/175,223,509)^(-184,080,000) put in form of equation
x=1/175,223,509
n=-184,080,000
A is approximately exp(-184,080,000/175,223,509)
According to EXCEL
0.3497474462 exact answer
0.3497474468 approximate answer
So they only differ on the 10th decimal place.
I should note that the approximation is more useful for theoretical explanations, than it is to try to help you calculator or computer.
Quote: WizardMy mathematical explanations about how a $2 ticket has a value of 90 cents. Her argument is simply "you have to be in it to win it."
...
I'd say "wish me luck," but I don't believe in luck.
On Saturday, I was sitting at a local cafe enjoying a mid morning meal, and reading some sci fi trash on the Kindle app on my cell phone. An acquaintance that I barely know saw me, and came over to say hi. He also decided to invite himself to join me. I ignored him while he ate, reading my novel. At one point, he asked me if I had purchased my lottery tickets yet. I said no. His response was, "What, you don't need $500 million?" I said that I would rather just keep the money that's in my pocket. I went back to reading, he went back to eating. A little while later, he told me that I should get a Kindle or a Nook so that I'd have a bigger screen to read on. I responded, "You're just bound and determined to tell other people how to spend their money, aren't you?" That shut him up for a little while, but then he was back on. "If you won the lottery, you could buy yourself one of those Kindles." I put my phone down, looked at him and said, "The value of your tickets is about half what you paid for them. Mathematically, you made a huge mistake. Besides, the winner isn't going to come from here in Phoenix, so any money you spent is wasted." He blinked, and said, "Well, you know what they say, you can't win if you don't play." I said, "I've already won, because my money stays in my pocket." Picked up my phone and proceeded to ignore him until he left.
Thing is, I don't really care that people buy lottery tickets. If you enjoy it, great. If you hope to win, great. But if you encounter someone who chooses not to buy a ticket, why do you feel the need to berate/belittle that person?
Quote: konceptumThing is, I don't really care that people buy lottery tickets. If you enjoy it, great. If you hope to win, great. But if you encounter someone who chooses not to buy a ticket, why do you feel the need to berate/belittle that person?
I'm thankful to those who buy lottery tickets (as long as it isn't with my money) because part of the money goes to state government. Without that lottery revenue, I would be paying more in taxes, or getting less services somehow.
Quote: WizardI'm thankful to those who buy lottery tickets (as long as it isn't with my money) because part of the money goes to state government. Without that lottery revenue, I would be paying more in taxes, or getting less services somehow.
If Nevada ever has a state income tax they should make it optional to donate a dollar to a income tax lottery where everyone filing (who opts a dollar) enters the pool to win a grand prize from the pool. Might even encourage tax filing.
Don't you still live in Nevada? No lotto money going there, I thought.
Quote: rxwineDon't you still live in Nevada? No lotto money going there, I thought.
Yes and yes. I've been scratching my head for years as to why you don't see a privately run lottery in the casinos. It could offer bigger jackpots and better odds than the state lotteries. The market caps of the bigger gaming companies are large enough to outdo MegaMillions and PowerBall.
Quote: WizardYes and yes. I've been scratching my head for years as to why you don't see a privately run lottery in the casinos. It could offer bigger jackpots and better odds than the state lotteries. The market caps of the bigger gaming companies are large enough to outdo MegaMillions and PowerBall.
Are casinos allowed to offer parimutuel games in NV?
Quote: WizardYes and yes. I've been scratching my head for years as to why you don't see a privately run lottery in the casinos.
Isn't Keno essentially a lotto game?
Quote: bigfoot66Are casinos allowed to offer parimutuel games in NV?
They offer horse racing. However, as Nareed said, the lottery is pretty much the same thing as keno.
Quote: WizardThey offer horse racing. However, as Nareed said, the lottery is pretty much the same thing as keno.
My thought was that there could be some regulatory problems. In the lotto the large prize at the top is always a function of the number of tickets sold, right? I guess that they could run a keno game with a progressive jackpot and it would be effectively the same thing as a lottery.
Quote: bigfoot66I guess that they could run a keno game with a progressive jackpot and it would be effectively the same thing as a lottery.
Yup. There are already several progressive keno games here.
Quote: WizardYes and yes. I've been scratching my head for years as to why you don't see a privately run lottery in the casinos. It could offer bigger jackpots and better odds than the state lotteries. The market caps of the bigger gaming companies are large enough to outdo MegaMillions and PowerBall.
I guess the casinos can already offer million-dollar prizes in linked slots -- and the benefit of the slot machine as opposed to lottery is that the players need to stay on property to play the slot. So maybe they get hungry and buy food, or maybe they hit the ATM and play more games than they planned. With lotto tickets you just buy them and leave.
Quote: sodawaterI guess the casinos can already over million-dollar prizes in linked slots -- and the benefit of the slot machine as opposed to lottery is that the players need to stay on property to play the slot. So maybe they get hungry and buy food, or maybe they hit the ATM and play more games than they planned. With lotto tickets you just buy them and leave.
I'm referring to 9-figure jackpots. This would be a way a guest could extend the fun of the trip. Buy some tickets while in the casino and check the numbers later at home. A company like Caesars, with casinos all over the country, I think would be perfect to do this. It is time to end the government monopoly on lotteries.
Quote: WizardIt is time to end the government monopoly on lotteries.
Hear Hear! It's time to end all government monopolies!! :)
Quote: WizardI'm referring to 9-figure jackpots. This would be a way a guest could extend the fun of the trip. Buy some tickets while in the casino and check the numbers later at home. A company like Caesars, with casinos all over the country, I think would be perfect to do this. It is time to end the government monopoly on lotteries.
Good luck trying to get interstate progressives allowed. I believe they can only exist on indian land today.
Do you remember Nevada Numbers? It failed msierably. Nevada Numbers
Quote: bigfoot66Hear Hear! It's time to end all government monopolies!! :)
We could a "like" button in this site...
Meantime, Windows 8 must be destroyed.
Quote: DRichDo you remember Nevada Numbers? It failed msierably.
Yes, I wrote a page about it. Nevada Numbers failed because:
1. Nobody knew about it.
2. It was more like keno (with 80 balls) than a lottery.
3. The odds were stingy, with a house edge of 46%.
4. The jackpots were too small, around 5-20M.
Quote: WizardThe odds were stingy, with a house edge of 46%.
I think "stingy" is a bit mild.
Quote: rxwineI think "stingy" is a bit mild.
but you gotta be in it to win it.
Quote: WizardIt is time to end the government monopoly on lotteries.
I really could not disagree with this more.
One benefit of public lotteries, which you mentioned earlier in the thread, is that the profits go to the state government, which provides public services.
Private lotteries run by casinos would see the profits go into the hands of shareholders, and do the public no good whatsoever.
We really don't want to allow casinos to "compete" with the government in this area, which would have the effect of taking money out of public coffers and into the pockets of wealthy casino shareholders.
Lotteries are the perfect sweet spot for government-run gambling, because there's really nothing to screw up. You sell the tickets and pay out the winnings. It's not like other areas of gambling, where competition would be good for the consumer.
However, I'm curious if it makes any sense to argue that a state with a higher population density has a greater chance of having sold the winning ticket than a state with a lower population density. Or, more accurately, does a state that sells a larger number of lottery tickets have a greater chance than the state that sells a smaller number of lottery tickets.
I get that the drawing is random, but if everybody buys quick pick random number tickets, then are the odds pushed toward the higher density of sales? (Sub-question: is there any information on how many tickets are sold that are quick pick vs pre-picked numbers?)
Quote: sodawaterI really could not disagree with this more.
One benefit of public lotteries, which you mentioned earlier in the thread, is that the profits go to the state government, which provides public services.
Private lotteries run by casinos would see the profits go into the hands of shareholders, and do the public no good whatsoever.
We really don't want to allow casinos to "compete" with the government in this area, which would have the effect of taking money out of public coffers and into the pockets of wealthy casino shareholders.
I don't understand why this argument applies to lotteries and not every area of the economy in your mind. They should sell iPhones so that they get the money instead of that greedy old Steve Jobs (I know he is dead). They should run all the grocery stores so that the profits go to the state....
Quote: sodawaterLotteries are the perfect sweet spot for government-run gambling, because there's really nothing to screw up. You sell the tickets and pay out the winnings. It's not like other areas of gambling, where competition would be good for the consumer.
Oh. So you are arguing that A) Government is incompetent, B) private, competitive industry is generally good for the consumer (though not in the area of lottery), and C) Money spent by the incompetent government provides more good to people than money spent by individuals.
I am sure that you would phrase it differently but the point would be about the same right?
Quote: bigfoot66I don't understand why this argument applies to lotteries and not every area of the economy in your mind. They should sell iPhones so that they get the money instead of that greedy old Steve Jobs (I know he is dead). They should run all the grocery stores so that the profits go to the state....
+1 Excellent post.
IMHO, the government f*cks up pretty much everything it touches (i.e. DMV, Post Office, IRS, etc).
Quote: ahiromuLet's say you can be paid $100 today or $105 next year, wherein the market would make you 5% interest (let's talk expected value here) and a flat 20% interest rate.
$100 today * 1.05 interest * .8 tax = $84
$105 next year * .8 tax = $84
I didn't see anyone comment on this. But the first line should be:
$100 today * .8 tax = $80 today, next year earn 5% for $4, get taxed on that so $4 * .8 = $3.2, for a total of 83.2.
The $105 tomorrow is better. Every year the compounded interest gets taxed, effectively deflating the return rate. So $105+5% in two years is better than $105 next year, and better than $100 now.
This assumes an investment that payout out every year like interest or dividends, unlike capital gains that can be deferred until you actually sell.
Quote: Beethoven9th+1 Excellent post.
IMHO, the government f*cks up pretty much everything it touches (i.e. DMV, Post Office, IRS, etc).
Thanks. As Adam Carolla points out, the government is like a mentally handicapped person when you need something from them, but the minute you are off on your income tax returns or they need something from you they suddenly turn into the valedictorian poindexter. I am not convinced the IRS is an inefficent organization, I believe they do exactly what they are supposed to do.
Quote: bigfoot66I am not convinced the IRS is an inefficent organization, I believe they do exactly what they are supposed to do.
Haha...touché
Quote: Beethoven9thThe government doesn't need any more of our money to waste.
I would think conservatives would be in favor of an EASY way to get the infamous "47%" to pay some taxes. Guess not.
Quote: bigfoot66I am not convinced the IRS is an inefficent organization, I believe they do exactly what they are supposed to do.
If they're supposed to impede productivity and provide a jobs program for accountants, then yes. Otherwise, they're just another inefficient agency.
Quote: rxwineI would think conservatives would be in favor of an EASY way to get the infamous "47%" to pay some taxes. Guess not.
You have conservatives mixed up with liberals. Conservatives want tax cuts for everyone.
Quote: Beethoven9thYou have conservatives mixed up with liberals. Conservatives want tax cuts for everyone.
Quote:There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it -- that that's an entitlement. And the government should give it to them. And they will vote for this president no matter what. ... These are people who pay no income tax. ...
Tax cuts for no income tax?
Quote: rxwineTax cuts for no income tax?
I'm glad you said that because it invalidates your previous post:
"I would think conservatives would be in favor of an EASY way to get the infamous "47%" to pay some taxes. Guess not."
If state coffers are filled by lottery money, , and lotto tickets, which are also bought by people at the bottom rung of the economic ladder...
"Private lotteries run by casinos would see the profits go into the hands of shareholders, and do the public no good whatsoever."
I responded by saying:
"The government doesn't need any more of our money to waste."
You replied to me with:
"I would think conservatives would be in favor of an EASY way to get the infamous "47%" to pay some taxes. Guess not."
Now you're talking about "people at the bottom rung of the economic ladder" buying lottery tickets, which is totally going off on a tangent.
But I do want to add (and I guess I'm going off on a tangent myself right now), my side has absolutely no problem with people who don't pay taxes. What we have a problem with is—when these people want to tax the crap out of the other 53%.
Quote: Beethoven9thBut I do want to add (and I guess I'm going off on a tangent myself right now), my side has absolutely no problem with people who don't pay taxes. What we have a problem with is...when these people to tax the crap out of the other 53%.
They don't? Oh I hear (from somewhere) why should everyone else pay all these taxes, when a large portion of the population pays none, more than once in arguments. Perhaps those people are not from here who argue that.
Well, anyway...that's what I hear.
Quote: rxwineThey don't? Oh I hear (from somewhere) why should everyone else pay all these taxes, when a large portion of the population pays none, more than once in arguments. Perhaps those people are not from here who argue that.
Well, anyway...that's what I hear.
What's wrong with that? They are arguing that they should pay less.....not that the other guy should pay more. Big difference.
Quote: Beethoven9thWhat's wrong with that? They are arguing that they should pay less.....not that the other guy should pay more. Big difference.
Is the heritage foundation a liberal group now?
http://www.heritage.org/research/commentary/2012/09/more-people-should-pay-taxes
Quote: rxwineIs the heritage foundation a liberal group now?
That's one group. Heck, Sen. Max Baucus (D-MT) opposes an internet sales tax, but does that mean that the Democrat party as a whole opposes taxes? I think not.
Quote: rxwineAlso --- as to the govenrment vs private lottery. If Nevada Numbers is the result of what private industry does, I'll take government. What'd the Wizard caluculate, a 43% take? And it failed as well. That is not proven success.
Again, you're going to pick one example and let that influence your entire decision??
And for the record, earlier in this thread the Wizard said: "It is time to end the government monopoly on lotteries."
