JB
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March 24th, 2012 at 8:13:06 AM permalink
For those of us who live in one of the 42 states that offer Mega Millions, here are the stats for Tuesday's drawing since the jackpot was not won last night:

Mega Millions Jackpot for 3/27/2012 Drawing
Option Amount
Annuity (26 yearly payments) $356,000,000
Cash (1 payment) $255,000,000

Tuesday's jackpot will be the 5th largest lottery jackpot in U.S. history and the 3rd largest jackpot in Mega Millions history.

Mega Millions Return Table for 3/27/2012 Drawing - Single Jackpot Winner
Option Taxes $1 Game Return
(No Megaplier)
$2 Game Return
(w/Megaplier)
Annuity Before 220.80% 119.14%
Cash Before 163.32% 93.27%
Annuity 35% federal tax withheld 149.89% 87.23%
Cash 35% federal tax withheld 112.53% 70.42%

So the $1 game is a good bet no matter which prize option you take, as long as you don't have to split the jackpot if you win it. Here are the returns if you have to split the jackpot with one other winner:

Mega Millions Return Table for 3/27/2012 Drawing - Two Jackpot Winners
Option Taxes $1 Game Return
(No Megaplier)
$2 Game Return
(w/Megaplier)
Annuity Before 119.50% 73.55%
Cash Before 90.76% 60.62%
Annuity 35% federal tax withheld 84.05% 57.60%
Cash 35% federal tax withheld 65.37% 49.19%

For those interested in the volatility, here you go (these figures assume a $1 bet and a single jackpot winner):

Mega Millions Volatility Table for 3/27/2012 Drawing
Option Taxes Variance Standard Deviation
Annuity Before 721,289,225.76 26,856.83
Cash Before 370,082,919.01 19,237.54
Annuity 35% federal tax withheld 304,754,027.19 17,457.21
Cash 35% federal tax withheld 156,369,362.64 12,504.77
Ibeatyouraces
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March 24th, 2012 at 8:46:22 AM permalink
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DUHHIIIIIIIII HEARD THAT!
JB
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March 24th, 2012 at 8:56:36 AM permalink
Quote: Ibeatyouraces

Variance is just to high to even bother. Just because its a good bet doesn't make it worth while.


I mostly agree, except for the fact that it is a life-changing amount of money. But yes, the variance is ridiculous.
bigfoot66
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March 24th, 2012 at 9:51:37 AM permalink
Variance is very high, but the good news is that for most of us on the forum losing $10 going for it is essentially inconsequential but winning would be probably the defining moment in our lives.
Vote for Nobody 2020!
FleaStiff
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March 24th, 2012 at 10:37:25 AM permalink
Quote: JB

For those of us who live in one of the 42 states that offer Mega Millions, here are the stats for Tuesday's drawing...

... for those who live in Florida where the similarly named Mega Dollars are offered the next drawing is 500,000. So save yourself the trip to the convenience store.
DJTeddyBear
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March 24th, 2012 at 10:38:06 AM permalink
This discussion reminds me of this commercial for NY Lottery / Mega Millions.
I invented a few casino games. Info: http://www.DaveMillerGaming.com/ ————————————————————————————————————— Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
Ibeatyouraces
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March 24th, 2012 at 10:59:34 AM permalink
deleted
DUHHIIIIIIIII HEARD THAT!
ChesterDog
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March 24th, 2012 at 11:54:40 AM permalink
Quote: DJTeddyBear

This discussion reminds me of this commercial for NY Lottery / Mega Millions.



Thanks for reminding me. This one is really funny, too.
Tiltpoul
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March 24th, 2012 at 1:00:41 PM permalink
When I worked for Sears, one day I had a customer come in from pouring rain. He came up to the counter, near where I was standing, and asked the cashier where he could buy a lottery ticket. The cashier, who was underage, wasn't sure. He turned to me to ask, where I responded, "I'm not sure; I don't gamble..." That got one of the most confounding looks...

At the time I stuck to poker and BJ, though I've expanded quite a bit since then. Still, I never play the lottery, though seeing the numbers is tempting me to throw 10 out for it.
"One out of every four people are [morons]"- Kyle, South Park
JB
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March 24th, 2012 at 1:12:16 PM permalink
Quote: Tiltpoul

I never play the lottery, though seeing the numbers is tempting me to throw 10 out for it.


It's a small price for an extremely unlikely but still non-zero chance of coming into a fortune. I have a grand total of $5 invested in Tuesday's drawing.
buzzpaff
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March 24th, 2012 at 1:16:36 PM permalink
Quote: JB

It's a small price for an extremely unlikely but still non-zero chance of coming into a fortune. I have a grand total of $5 invested in Tuesday's drawing.



Gee, another big spender bragging here. SIGH
FleaStiff
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March 24th, 2012 at 3:03:18 PM permalink
Lottery tickets make good birthday gifts.

I think the poor get so desperate sometimes that lotteries are dreams. Youths seem to mill around lotto vendors though perhaps its simply that there is no where else to go.
Toes14
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March 24th, 2012 at 3:58:00 PM permalink
My kids were with me when I stopped to by my tickets, and they were all excited about how much it was; asking "if we win, will you buy me a pony?", that type of stuff. They didn't care when I told them I had a better chance of getting hit by lightning than winning.

Still, it is a life changing amount, and it's fun to dream about what you'd do if you won . . .
"Bite my Glorious Golden Ass!" - Bender Bending Rodriguez
DJTeddyBear
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March 24th, 2012 at 4:17:52 PM permalink
Quote: Toes14

My kids were with me when I stopped to by my tickets, and they were all excited about how much it was; asking "if we win, will you buy me a pony?", that type of stuff. They didn't care when I told them I had a better chance of getting hit by lightning than winning.

Hmmm....

Next they're gonna ask, "If you get hit by lightning, can we use the insurance money to buy a pony?" LOL
I invented a few casino games. Info: http://www.DaveMillerGaming.com/ ————————————————————————————————————— Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
SanchoPanza
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March 24th, 2012 at 9:39:34 PM permalink
Quote: JB

So the $1 game is a good bet no matter which prize option you take, as long as you don't have to split the jackpot if you win it.


I'm not 100% sure, but the calculated return on the annuity option does not seem to factor in 25 years of inflation.
JB
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March 24th, 2012 at 9:51:13 PM permalink
Quote: SanchoPanza

I'm not 100% sure, but the calculated return on the annuity option does not seem to factor in 25 years of inflation.


I didn't factor it in, so probably not.

Here is an insightful article about cash vs. annuity.

Using this inflation calculator, today's value of the annuity is approximately $272,721,623. Before I used that calculator, I made my own estimate (by averaging the yearly inflation between 2000 to 2011, which was 2.47%) and applying that to the $13,692,307 payments to come up with a value of $266,832,363 in today's dollars. Both scenarios predict the annuity value to be worth at least $10 million more (in today's dollars) than the cash option of $255 million.

That said, this inflation stuff is not my territory at all. Bit-shifting to multiply or divide by a power of 2 or using XOR to swap two integers without a temporary variable is more my thing. :)
FleaStiff
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March 25th, 2012 at 5:43:07 AM permalink
"For the second time in three months, the same liquor store in Mountain View this week sold a lottery ticket worth more than a quarter million dollars..."
Okay. So why are rich people in silicon valley buying lottery tickets in the first place and why is someone doing so well there?
Doc
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March 25th, 2012 at 8:06:42 AM permalink
Quote: FleaStiff

Okay. So why are rich people in silicon valley buying lottery tickets in the first place and why is someone doing so well there?

Check with our roulette fans here -- it's all a matter of study and practice.
AcesAndEights
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March 26th, 2012 at 11:17:25 AM permalink
Do we know the probability of picking the same numbers as someone else? If you could calculate/estimate that probability, you could form an overall return percentage...somewhere between 149% and 84% for the after-tax annuity.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
JB
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March 26th, 2012 at 11:39:27 AM permalink
Quote: AcesAndEights

Do we know the probability of picking the same numbers as someone else? If you could calculate/estimate that probability, you could form an overall return percentage...somewhere between 149% and 84% for the after-tax annuity.


I think it would require knowing how many tickets are in play.

I see they increased the theoretical annuity jackpot from $356 million to $363 million. That makes it tied for 4th position as the largest lottery jackpot in U.S. history.
rdw4potus
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March 26th, 2012 at 11:54:50 AM permalink
Tax effects also aren't considered. There are (at least) two that carry weight:

1. the annuity has a bit of a tax shelter effect because some of the money hits the lowest tax brackets in each of 25 years.
2. Taxes, as a weighted average, will almost certainly be higher later in the term than in year 1.

Those offset, but I think the net effect slightly benefits the annuity.
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
CrystalMath
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March 26th, 2012 at 12:17:36 PM permalink
Quote: JB

I think it would require knowing how many tickets are in play.

I see they increased the theoretical annuity jackpot from $356 million to $363 million. That makes it tied for 4th position as the largest lottery jackpot in U.S. history.



Last July, we looked at the EV of mega millions, and this is what I wrote:
Old' rel='nofollow' target='_blank'>https://wizardofvegas.com/forum/gambling/other-games/3918-lotto-positive-ev/7/#post83939"]Old Mega Millions Thread

At 363MM, I expect 210MM tickets to be sold. Given that you win, this table shows the frequency that you will need to share the prize with other players:
Other winners to split prize with Probability Split Jackpot Value (Millions)
0 0.30266138 363
1 0.361722921 181.5
2 0.216154884 121
3 0.08611183 90.75
4 0.025728937 72.6
5 0.00614994 60.5
6 0.001225007 51.85
7 0.000209151 45.37
8 3.12456E-05 40.33
9 4.14921E-06 36.3
10 4.95889E-07 33


This gives an estimated average prize of 211.8MM, given that you win.

This is before accounting for taxes and discounting the annuity payments.

But, I've been thinking about it and I don't think that the EV makes a difference at all. There are two outcomes: you lose a dollar or you have a life changing win. The amount of the life changing win is immaterial because the utility of money drops. My life would be largely the same if I won 20 million vs 211 million. In reality, I think I would rather win 2nd prize, so I don't have the same publicity.
I heart Crystal Math.
boymimbo
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March 26th, 2012 at 1:24:03 PM permalink
Last week, the prize distribution was:


MatcheswinnersOddsTickets sold
5+0393,904,701:1152,283,339
4+1218689,065:1150,216,170
4+09,01315,313:1138,016,069
3+19,43013,781:1129,954,830
2+1142,733844:1120,466,652
3+0407.708306:1124,758.648]
1+1823,738141:1116,147,058
0+11,486,12774.8:1111,162,300


All prizes about 1:39.89. Total prizes won = 2,879,006. Tickets sold then would be 114,839,559.

I suspect that we'll hit well over 200,000,000 tickets sold for this draw.
----- You want the truth! You can't handle the truth!
rdw4potus
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March 26th, 2012 at 1:39:53 PM permalink
Quote: boymimbo

Last week, the prize distribution was:


MatcheswinnersOddsTickets sold
5+0393,904,701:1152,283,339
4+1218689,065:1150,216,170
4+09,01315,313:1138,016,069
3+19,43013,781:1129,954,830
2+1142,733844:1120,466,652
3+0407.708306:1124,758.648]
1+1823,738141:1116,147,058
0+11,486,12774.8:1111,162,300


All prizes about 1:39.89. Total prizes won = 2,879,006. Tickets sold then would be 114,839,559.

I suspect that we'll hit well over 200,000,000 tickets sold for this draw.



I think you're right. And Friday 3/30 could be absolutely huge if the jackpot isn't won tomorrow night. That day is a payday two ways, plus it's in the heart of tax season. Yikes!
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
AcesAndEights
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March 26th, 2012 at 4:38:12 PM permalink
Well, I'm buying 30 tickets tonight for myself and 2 friends. If it doesn't hit tomorrow, will probably do the same for the next drawing.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
FinsRule
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March 26th, 2012 at 5:19:50 PM permalink
Quote: Toes14

My kids were with me when I stopped to by my tickets, and they were all excited about how much it was; asking "if we win, will you buy me a pony?", that type of stuff. They didn't care when I told them I had a better chance of getting hit by lightning than winning.

Still, it is a life changing amount, and it's fun to dream about what you'd do if you won . . .



I hate when people say "you have a better chance of being hit by lightning than winning the lottery"

How many people die by lightning strikes each year? Google says about 60. How many people win 1 million dollars or more in the lottery every year? Wayyyyyyy more than 60.

Can we put this to bed finally?
ChesterDog
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March 26th, 2012 at 5:42:55 PM permalink
Quote: FinsRule

I hate when people say "you have a better chance of being hit by lightning than winning the lottery"

How many people die by lightning strikes each year? Google says about 60. How many people win 1 million dollars or more in the lottery every year? Wayyyyyyy more than 60.

Can we put this to bed finally?



Yes. Let's switch it.

"Honey, don't go golfing today! There's a 90% change of thunderstorms."

"Don't worry. I have a better chance of winng the lottery than getting struck by lightning."
FinsRule
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March 26th, 2012 at 8:04:06 PM permalink
Quote: ChesterDog

Yes. Let's switch it.

"Honey, don't go golfing today! There's a 90% change of thunderstorms."

"Don't worry. I have a better chance of winng the lottery than getting struck by lightning."



Ok, on a day when there is lightning in the forecast, you have a better chance of being struck by lightning than winning the lottery. My point is still valid however.
WongBo
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March 26th, 2012 at 8:14:45 PM permalink
about 1000 people get struck by lightning in a year in the US
making the odds about 313,000:1
so that would be the better bet than the mega millions...
with that being said, i bought the winning ticket today
In a bet, there is a fool and a thief. - Proverb.
rdw4potus
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March 26th, 2012 at 9:11:11 PM permalink
Quote: WongBo

about 1000 people get struck by lightning in a year in the US
making the odds about 313,000:1
so that would be the better bet than the mega millions...
with that being said, i bought the winning ticket today



I'm not so sure. There are 104 MM drawings per year. If I buy 20 tickets per drawing for one year...
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
WongBo
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March 26th, 2012 at 9:18:19 PM permalink
buying twenty tickets does not reduce the odds by a factor of twenty, as MANY people seem to think...
In a bet, there is a fool and a thief. - Proverb.
boymimbo
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March 27th, 2012 at 12:37:58 AM permalink
I bought $10 yesterday whilst on the NYS freeway. I'll buy all members on this site a beer if I win.
----- You want the truth! You can't handle the truth!
FleaStiff
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March 27th, 2012 at 12:44:42 AM permalink
Lightening strikes take place in largely rural or recreational settings often with warning brought by thunderstorms. Such events are therefore skewed amidst lower population densities than the buyers of lottery tickets.

Now would I buy a ticket? If I were in a state where I could get one, yes.
Would I stay out on the greens holding a metal golf club in a storm? No.
FinsRule
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March 27th, 2012 at 4:28:45 AM permalink
Quote: WongBo

about 1000 people get struck by lightning in a year in the US
making the odds about 313,000:1
so that would be the better bet than the mega millions...
with that being said, i bought the winning ticket today



If the question is, which is more likely, winning Mega Millions, or being struck by lightning, the odds are going to be lightning unless you buy a lot of tickets.

But if the question is, which is more likely, winning one million in the lottery, or being struck by lightning, the odds are lottery.
FinsRule
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March 27th, 2012 at 4:31:09 AM permalink
Quote: WongBo

buying twenty tickets does not reduce the odds by a factor of twenty, as MANY people seem to think...



Please explain this to me.

If a lottery is drawing one number between 1 and 100, and I have bought 20 tickets, how are my odds of winning not 1 in 5?
Nareed
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March 27th, 2012 at 5:36:45 AM permalink
Quote: FinsRule

If the question is, which is more likely, winning Mega Millions, or being struck by lightning, the odds are going to be lightning unless you buy a lot of tickets.

But if the question is, which is more likely, winning one million in the lottery, or being struck by lightning, the odds are lottery.



It also depends on where you live and where you spend most of your time. If you live in Vegas you're less likely to be struck by lightning than if you live in Alabama or Florida. Also if you live in Vegas, you're less likely to be able to purchase lottery tickets at all :)
Donald Trump is a fucking criminal
AcesAndEights
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March 27th, 2012 at 11:38:40 AM permalink
Okay, so I bought my 40 tickets last night (me and 3 friends) and just had the 7-Eleven clerk give me 40 quick picks. When I started looking at the tickets, however, it seemed like they weren't really truly random. After thinking about it for an embarrassingly long amount of time, I realized that all of the numbers are an increasing sequence (i.e. the next number is always more than the previous number). I went to the Mega Millions website and found that the same is true of the last 25 picks and also all of the numbers drawn when you refresh their "example" random number page.

Finally after watching some of the draw videos, I realized that the order of the numbers isn't important, and they just re-order them from smallest to largest for the quick picks and when reporting the winning numbers. And here I thought you had to match everything in order to win the jackpot! I feel a little silly now, considering the math involved in that procedure would require a much, much, MUCH larger jackpot for it to be +EV.
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
boymimbo
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March 27th, 2012 at 10:02:43 PM permalink
The numbers are 9, 19, 34, 44, 51 megaball: 24.

Good luck, all.
----- You want the truth! You can't handle the truth!
bushman
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March 27th, 2012 at 10:08:16 PM permalink
No jackpot winners. Estimated 476 million on Friday. Wow.
Never count your winnings at hour 23 of a 24-hour drive.
JB
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March 27th, 2012 at 10:45:42 PM permalink
I am the proud owner of one of the 2,533,874 tickets that won $2.
AcesAndEights
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March 27th, 2012 at 11:00:24 PM permalink
Quote: JB

I am the proud owner of one of the 2,533,874 tickets that won $2.


Hey me too!

40 bucks got me one $2 winner. The other 3 investors now only owe me $9.50 instead of $10. Wooo!

For the drawing on Friday, I will probably just drop $100 of my own money. Eff that sharing stuff!
"So drink gamble eat f***, because one day you will be dust." -ontariodealer
FleaStiff
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March 28th, 2012 at 12:27:30 AM permalink
Quote: bushman

No jackpot winners. Estimated 476 million on Friday. Wow.

I sure wish I lived in a Mega Millions state.
ewjones080
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March 28th, 2012 at 3:54:15 AM permalink
Why is the differential between cash and annuity so small, while the annuity is like 3X as much as the cash for a big prize for the Powerball?
SlangNRox
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March 28th, 2012 at 4:13:29 AM permalink
Quote: ewjones080

Why is the differential between cash and annuity so small, while the annuity is like 3X as much as the cash for a big prize for the Powerball?



The difference is so small because the interest rates are so low. Cash value used to be 1/2 the annuity in the past, but the lottery can't earn those rates now on an annuity. I would suspect that this mega millions jackpot would be the largest ever if (if it isn't already) if the interest rates were higher.
miplet
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March 28th, 2012 at 4:23:43 AM permalink
Quote: ewjones080

Why is the differential between cash and annuity so small, while the annuity is like 3X as much as the cash for a big prize for the Powerball?


Read this: http://www.megamillions.com/faqs/#16. The main reason is Mega Millions is over 25 years and always the same amount per year. Powerball is over 29 years and payments increase by 4% each year.
“Man Babes” #AxelFabulous
Hollywood12
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March 28th, 2012 at 7:15:48 AM permalink
I completly disagree with it being a good bet. Just because the amount you win is a ridiculous sum doesnt disqualify the fact its still a 1 in 175 million odd. Who gives a sh** that the math says hey! 220% return. Sure the math says that, but I say bullsh** to that. Just because its a 220% doesnt mean anything for the odds. 20 millioin or 359 million your odds are always the same. Im not getting all up in the posters face, but sometimes math needs to be taken with a very big grain of salt. Even if the mega millions was 1 billion dollars which im guessing be like 700% return doesnt mean your odds change to like 1 in a million to win that 1 billion. Odds stay the same. The thought process lets buy one we got a positive expected return makes about as much sense to me as playing a side bet in a casino for a dollar that has an odd of 1 in 175 million. But wait you'll get 400 million if you hit it. IF IF IF you hit it. Not saying I'm not playing I am. But not because the math says its a good bet which to me its still a bad bet no matter how much you can win because the odds are so horrible. I look at math when gambling, but also common sense and sometimes math and common sense dont add up to 1.
TIMSPEED
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March 28th, 2012 at 7:48:28 AM permalink
Quote: boymimbo

The numbers are 9, 19, 34, 44, 51 megaball: 24.

Good luck, all.


LOL, I bought $5 worth of Quick-Picks...
One of my QP's was: 10, 20, 25, 45, 55 and MEGA of 25...LoL..one number off all the way huh?
Gambling calls to me...like this ~> http://www.youtube.com/watch?v=4Nap37mNSmQ
boymimbo
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March 28th, 2012 at 7:55:18 AM permalink
So, with 4,715,569 total prizes won and odds at 39.89:1, the estimated number of tickets sold was 188,104,000.

With 47 prizes at 250,000, that megabill was surely elusive!

The odds of 0 winners (k) given that 188,104,000 tickets (n) were sold and the odds of winning are 175,711,536:1 (o) can be expressed as:

combin(n,k)*((1/o)^k)*(((o-1)/o)^(n-k))

0 0.342827594
1 0.3670064
2 0.196445238
3 0.070100015
4 0.018761
5 or more: 0.0048598

I'm in SoCal this week so will have to pick up my lotto tickets here. I think I won at least $2 with the set I bought on Sunday, but the tickets are in my car, and my car is at YYZ so I won't know until I get home.
----- You want the truth! You can't handle the truth!
FleaStiff
FleaStiff
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March 28th, 2012 at 8:01:53 AM permalink
Quote: Hollywood12

I look at math when gambling, but also common sense and sometimes math and common sense dont add up to 1.


Yes. Its similar to that dealer who when asked about some side bet replied "Its a sucker bet, but its only a dollar and if it hits and you didn't bet on it, you will never hear the end of it from your wife". That is the way the casino can offer sucker bets to someone who knows math! Have a dealer who reminds him its only a dollar and who also reminds him that his wife will nag him all night long about it.

Lotteries are pretty much the same way. They get people to make sucker bets by offering the illusion of untold wealth. Everyone buying a one dollar ticket dreams of his 300 foot yacht. Some know the odds some don't but the illusion is still there. And its only a buck!
Ibeatyouraces
Ibeatyouraces
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March 28th, 2012 at 8:02:53 AM permalink
deleted
DUHHIIIIIIIII HEARD THAT!
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