Ask the Wizard
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Quote: benbakdoffIf you click on Mohegan Sun's web site right now there is a tally sign that says today's slot payouts are $7,113,567.18. Another sign says $8.4 billion paid out in 2009. How are these figures computed?
That is probably the gross win. In my opinion, that figure has zero value to the player. It would only be informative if compared to the total amount bet.
Quote: WizardThat is probably the gross win. In my opinion, that figure has zero value to the player. It would only be informative if compared to the total amount bet.
Exactly. We have billboards in our state that have slots payouts at a specific casino. Its meaningless without knowing how much was put into the slots to begin with.
2. What is the optimal buy-in strategy for casino bingo? At what points do progressive coverall bonuses become positive EV?
3. What dynamics affect football totals betting as the season goes on, the weather gets worse, and there is more information on teams' recent performance? How easy (or difficult) is it to find errors in the line?
4. Stations offers a football contest that pays for most losers as well as most winners. Given that the most loser prizes are pretty substantial, should one try for most losers right from the get-go? How would you estimate how many others are trying the same strategy?
5. Two persons enter a major WSOP event. One is a seasoned pro; the other is a rank amateur. What would you consider their relative equities in the prize fund to be, given the makeup of most WSOP fields?
6. What is the house edge in NHL hockey betting?
7. In blackjack, are there specific cards whose relative presence or absence can affect particular basic strategy decisions, such as the number of 9s and 8s in the deck affecting whether you should or should not hit a 12? If so, is it worthwhile to keep a side count of any such denominations?
8. What numbers should you claim, if you have a choice, in an office football pool? (10x10 grid with 100 "squares".)
9. What are some ways to boost your apparent "theo" losses for comp purposes, while minimizing your actual losses?
10. Can you recommend any literary fiction that treats the world of gambling faithfully and accurately?
Quote: mkl6543211. A Megabucks or lottery winner is often given the choice of receiving the face amount of his winnings as an annuity, or a much smaller lump sum. How fair are the usual lump sum offers, given the calculation of present value?
They give about half for the lump sum, before taxes. That is about actuarially fair. However, almost all of it will be in the top tax bracket. After tax considerations, I think you would make out better with the annuity.
Quote: mkl654321What is the optimal buy-in strategy for casino bingo? At what points do progressive coverall bonuses become positive EV?
The optimal buy-in is usually $0. The breakeven point on the coverall progressive would depend on the cost of the card and the jackpot amount. I write about the Jumbo Jackpot at Station casinos on my site.
Quote: mkl654321What dynamics affect football totals betting as the season goes on, the weather gets worse, and there is more information on teams' recent performance? How easy (or difficult) is it to find errors in the line?
A lot of people believe that in cold weather less points will be scored. However, I disagree. I don't have any data to prove it. I think a good bet is to wait for a game with REALLY cold weather, like 20 degrees or less, and then bet the over, because all the squares will be betting the under. I can't substantialy that opinion, so don't want to make that an official Q&A.
Quote: mkl654321Stations offers a football contest that pays for most losers as well as most winners. Given that the most loser prizes are pretty substantial, should one try for most losers right from the get-go? How would you estimate how many others are trying the same strategy?
It would depend on the number of other players with that strategy, and what the low prize is. I'll try to investigate my next trip to the Red Rock.
Quote: mkl654321Two persons enter a major WSOP event. One is a seasoned pro; the other is a rank amateur. What would you consider their relative equities in the prize fund to be, given the makeup of most WSOP fields?
I'm not a good one to ask. I tend to think head to head the rank amateur would have at least a 40% chance of beating a seasoned pro. However, poker is not my strong point, so I'll that as just an educated guess.
Quote: mkl654321What is the house edge in NHL hockey betting?
Against a 20-cent line, 4.76%.
I'll get to the rest later.
Quote: EvenBobHow much money do you have to win before a casino see's you as a threat?
It depends why you're winning it.
Quote: mkl654321In blackjack, are there specific cards whose relative presence or absence can affect particular basic strategy decisions, such as the number of 9s and 8s in the deck affecting whether you should or should not hit a 12? If so, is it worthwhile to keep a side count of any such denominations?
Yes. However, it isn't worth the fuss. I think the easiest way to get above basic strategy is my ace-five count.
Quote: mkl654321What numbers should you claim, if you have a choice, in an office football pool? (10x10 grid with 100 "squares".)
Good question, but I answered it before.
Quote: mkl6543219. What are some ways to boost your apparent "theo" losses for comp purposes, while minimizing your actual losses?
I might use this one. The simple ways are to take lots of breaks, and bet more when the floor supervisor is watching. It is open to debate if tipping is worth the additional theo you might get out of it.
Quote: mkl654321Can you recommend any literary fiction that treats the world of gambling faithfully and accurately?
Good question. Off hand, I liked Gambling Wizards by Richard Munchkin. No, I wasn't in it.
Great questions. I have two comments about the Wiz' answer for one of them.
Add: ...you should talk to your accountant before making that decision.Quote: WizardThey give about half for the lump sum, before taxes. That is about actuarially fair. However, almost all of it will be in the top tax bracket. After tax considerations, I think you would make out better with the annuity.Quote: mkl6543211. A Megabucks or lottery winner is often given the choice of receiving the face amount of his winnings as an annuity, or a much smaller lump sum. How fair are the usual lump sum offers, given the calculation of present value?
On that note, you should be aware of WHEN or IF you even get the option to decide.
I have a buddy that works for the NJ Lottery. One of his jobs is to track down people who are collecting a yearly check and have moved without telling the lottery commission the new address. Yep, there are a LOT of people that do that!
It became such a bad problem that they trained all of the lottery dealers to not ask, and to automatically hit the 'Lump Sum' button if the person buying tickets doesn't specify. If you win and selected annuity, you get another chance to change your mind, but not if the ticket says Lump Sum.
Quote: DJTeddyBearI have a buddy that works for the NJ Lottery. One of his jobs is to track down people who are collecting a yearly check and have moved without telling the lottery commission the new address. Yep, there are a LOT of people that do that!
It became such a bad problem that they trained all of the lottery dealers to not ask, and to automatically hit the 'Lump Sum' button if the person buying tickets doesn't specify. If you win and selected annuity, you get another chance to change your mind, but not if the ticket says Lump Sum.
This reminds me of all the unclaimed safe deposit boxes & bank accounts, unclaimed beneficiaries of the various this and that; it is a monumental amount of money each year in the world. No wonder states run lotteries too! States have written laws that they get the money, generally, now I think.
BTW for these reasons never agree to paperless statements from banks etc.
Quote: JerryLoganWizard, did you see the question about vp machine card shuffle/deals I posted (but should have posted here?) in a different thread? Have you any knowledge on exactly how they operate?
I just put in a reply in that thread. I've answered that question before in the column.
Quote: mkl6543211. A Megabucks or lottery winner is often given the choice of receiving the face amount of his winnings as an annuity, or a much smaller lump sum. How fair are the usual lump sum offers, given the calculation of present value?
I'm actually interested in the whole mechanics of the Megabucks and other lump sum prizes... can you 'follow the money' and see where the jackpot comes from, and who gains from each of the pay out potions, and if the companys actually have the money in question on hand?
(E.g. if you offer a $1 million dollar jackpot that actually comes as 20 year, 50k annunity or a lump sum of $500,000, was there really $1 million in the pool originally, who pays the annunity, and who gets the interest on that $1 million? Is money "lost" from the jackpot, lost to the players and gained by another third party? etc).
I believe the fund manager normally invests the funds in long-term government bonds, but I don't know whether that is required for 100% of the funds.
"The advertised POWERBALL jackpot is set by MUSL for each drawing. Jackpots are calculated based on anticipated sales for that draw, funds rolled over from previous draws and current interest rates for long-term investments. For every $1 ticket sold, 32.5% is allocated to the top-prize pool. The starting jackpot prize will be a guaranteed $20 million and will roll over by $5 million until it becomes self-funding. The MUSL reserve accounts will be used to supplement the guaranteed jackpots, if needed."
This leads me to believe that the entire annuity is funded when the jackpot is hit.
Yes, I agree. It is just that the amount required to "fully fund" the annuity is far less than the payments that will be made over the term of the annuity. The full-funding amount is what is offered as an optional lump sum payment.Quote: soulhunt79...This leads me to believe that the entire annuity is funded when the jackpot is hit.
So if the point was a 10 you would be looking at the 6.67% for making the point and the PL bet now has nothing to do with the bet other then the fact that you are going to get paid even money for that part of your bet?
Quote: DocYes, I agree. It is just that the amount required to "fully fund" the annuity is far less than the payments that will be made over the term of the annuity. The full-funding amount is what is offered as an optional lump sum payment.
Isn't the annuity just whatever the jackpot is? Say, 200 million. I thought that was just split up according to the terms of the annuity.
If the lottery is indeed putting the 32.5 cents away for every ticket, the 200 million jackpot is in a bank account somewhere at the time the jackpot is won. The lottery pays people their money monthly and the lottery gets all the interest for that money sitting there in a bank.
Quote: superrickWhen playing craps and the PL with odds is it a miss understanding that after the point has been established that your odds are still 1.47%. Wouldn’t the odds now reflect the odds on the point that was established?
So if the point was a 10 you would be looking at the 6.67% for making the point and the PL bet now has nothing to do with the bet other then the fact that you are going to get paid even money for that part of your bet?
The passline is a contract bet so it doesn't matter. The bet has an EV of -1.41% when booked. Looking at what happens after you make it but before it's over is basically like watching a horse race. It can be exciting, and sometimes you know your horse isn't going to win, but you still can't bet on the race after it starts.
To use your example, if the point was 10 the conditional probability of winning is 1/3. If you wanted to compute a conditional EV, it would be -33.33%. However, you're not just making an even-money bet on 10 vs 7 so you don't have an unconditional -33.33% EV (that's called a put bet). For the passline, you have to consider the likelihood of getting that 10 in the first place, which is only 3/36. The rest of the time the bet has a different conditional EV after the first roll (either +100% for 7/11, -100% for craps, or either -33.33%, -20%, or -9.1% if you establish a point).
When you add them all up weighted by likelihood, the result is -1.41%.
You'd think so, but if that were the case, why is the lump sum option so much less? It's because the lump sum is the actual collections that will be put into the annuity account if you choose annuity payments.Quote: soulhunt79Isn't the annuity just whatever the jackpot is? Say, 200 million. I thought that was just split up according to the terms of the annuity.
If the lottery is indeed putting the 32.5 cents away for every ticket, the 200 million jackpot is in a bank account somewhere at the time the jackpot is won. The lottery pays people their money monthly and the lottery gets all the interest for that money sitting there in a bank.
Quote: DocYes, I agree. It is just that the amount required to "fully fund" the annuity is far less than the payments that will be made over the term of the annuity. The full-funding amount is what is offered as an optional lump sum payment.
Which is less than the jackpot advertised. So where does the extra money go?
Or was there never $1 million, just enough to create a $50k, 20 year annuity?
No. The advertised jackpot is an estimate of the total amount of the annuity payments. It is based on the amount of any rollover from previous weeks, an assumption of a single winner, an estimate of the number of tickets to be sold, the portion of sales allocated to the jackpot fund, and the expected pricing of a long-term annuity with the specified pattern of payments.Quote: soulhunt79Isn't the annuity just whatever the jackpot is? Say, 200 million. I thought that was just split up according to the terms of the annuity.
If the lottery is indeed putting the 32.5 cents away for every ticket, the 200 million jackpot is in a bank account somewhere at the time the jackpot is won. The lottery pays people their money monthly and the lottery gets all the interest for that money sitting there in a bank.
If they advertise a $200 million (estimated) jackpot, there is no where close to $200 million on hand. They expect to have a major portion of that $200 million earned via the annuity fund manager investing the money that is on hand at the time the lottery is won. Both the fund manager and the lottery corporation are making a commitment that the funds will be available for each of the annual payments. If you choose the immediate lump sum payment instead, then you get the smaller amount that they actually have on hand right then, and it's up to you to invest, spend, gamble away, whatever.
You owe taxes either way. If you take the annuity, you will likely pay a higher total amount of taxes (unless you have a very creative accountant) because you will receive more total money. But you will receive the money and pay those taxes over decades, probably at a lower tax rate too because you will receive less in each tax year, so it is generally a better financial option to take the annuity.
Edit: Sorry. the previous two posts were entered while I was plodding away at the keyboard. If my explanation doesn't cover it all, please ask again, and I will try to fill in/clarify.
Quote: DJTeddyBearYou'd think so, but if that were the case, why is the lump sum option so much less? It's because the lump sum is the actual collections that will be put into the annuity account if you choose annuity payments.
Well the lump sum is less because it had to be less. You can't offer 100 million now and 100 million over 20 years. Noone in their right mind would take it.
I'd be curious to know what the margins and costs are for actually running the lottery then. It just surprises me that 67.5% of the money brought in isn't enough to pay the bills + all winners minus the jackpot.
For that kind of info, you should probably check the web site of the particular state's lottery. I live in North Carolina. The following quote is from the North Carolina Education Lottery web site.Quote: soulhunt79...I'd be curious to know what the margins and costs are for actually running the lottery then. It just surprises me that 67.5% of the money brought in isn't enough to pay the bills + all winners minus the jackpot.
The web site also has links to financial reports for the past few years. I think there are links or FAQs telling how specific lottery games allocate the payout amounts between jackpots and other specific winning tickets.Quote:The State Lottery Act, in order to increase and maximize the available revenues for education purposes, prescribes the following guidelines as to how each lottery dollar will be spent which are to be adhered to the extent practicable. Retailers receive a 7% commission for selling tickets. Up to 8% may be spent on administration. At least 50% will be paid out in prizes and as nearly as practicable 35% will be transferred to the Education Lottery Fund at the Office of State Budget and Management. 100% of the net proceeds of the North Carolina Education Lottery go to education programs.
I guess I am not clear what you mean about "67.5% of the money brought in isn't enough to pay the bills + all winners minus the jackpot."
When playing craps and the PL with odds is it a miss understanding that after the point has been established that your odds are still 1.47%. Wouldn’t the odds now reflect the odds on the point that was established?
So if the point was a 10 you would be looking at the 6.67% for making the point and the PL bet now has nothing to do with the bet other then the fact that you are going to get paid even money for that part of your bet?
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Such a basic misunderstanding of what a simple pass line bet means raises the question of whether the poster intentionally omitted the comeout from his argument, he is unable to comprehend it or he is trolling.
Past comments include:
"You both lose the right betters and the wrong betters, can lose at about the same rate if the tables are choppy!
For the wrong players they have to get pass the come-out rolls and just how many times do you see where the seven is killing both sides?"
and
"By betting your PL bet you locked your options, the only way you can win is for the point to be made again; did you forget what you are trying to tell me about the advantage, because the 7 was going to be made on the come out roll? What changed is the roll going on forever now that the point was established, or will the math of the game bite you in your butt when the 7 is made 4 rolls after the point was established?"
Quote: Doc
I guess I am not clear what you mean about "67.5% of the money brought in isn't enough to pay the bills + all winners minus the jackpot."
It was simply the purchase money minus the jackpot which for powerball seems to be 32.5%.
100% - Total purchases
32.5% - Jackpot payout according to powerball
14% - Payout to all other winners in powerball
15% - Store fees and Admin costs from your quote
That still leaves like 38% of the money left and this is assuming they are funding the entire annuity up front.
Not sure if it was clear or not before but I'm also treating the lottery as a closed system. While I know it does pay for things like education, once it leaves the lottery system I consider it just random government money. My assumptions were based on the idea that if nothing was removed for non lottery operations there would be enough money from just the purchases of tickets to pay off an entire annuity the moment a jackpot is won. I'm struggling to come up with ways they spend the extra 38%, let alone come up with ways they spend more and have to dip into the 32.5% I set away for the jackpot.
State lotteries have a higher "house advantage" than any of the games in a regular casino, with keno being the only thing that even comes close, I think. But this major hold out, or "profit" is what enabled the laws to be enacted. Each state has specific purposes designated for these proceeds, and education is a very common destination for the funds. The intent is either to improve the education (or other) functions or to reduce the load on the taxpayers that previously funded these public activities. There is no claim that they offer the players a particularly good wager -- it's just for the "fun" of playing. :-)
Quote: WizardThis site has been a good source for "Ask the Wizard" questions. However, I'm currently running low on good questions. So, I welcome you to try to challenge me with some good ones. Please, nothing about betting systems. Also, nothing that is already on my site, like "what is the effect of the dealer standing on soft 17?" Make them interesting, not just for yourself, but for everybody.
I thought I had made a good bet, but my brother is making fun of me.
My friend was running in the Chicago Marathon. Without knowing his runner number, he gave me 10:1 odds that his runner number would be prime. Did I make a good bet or a bad bet? What should fair odds have been?
I ended up losing $1 on the bet...
The player would have the option of where to set the risk meter and the option to change it periodically. The player would also answer some personality questions. The question is where would most people end up and what personality traits drive you one way or the other.
The problem is that such a test machine would not have any true driving forces unless you were playing for real money.
And it gets worse if the Chicago Marathon is seeded and he's a good runner because good runners get lower numbers. In the first half of the pool, there are 2525 primes in the first 22500. If he knew he was seeded in the first half, he'd have a 23.4% edge over you.
Quote: appistappiswiz, have you ever come up with how the house edge in tiles can be lowered if you know where the four teens and days are???????????
No. With that, please stop asking new questions in this thread. Make a new thread for them.
Here in South America we have the Oasis Poker issued by the Wiz at his site. One variation is that here we are allowed to talk to other players during the game, even by asking if they have a 'X' card. My question is: in a full table, if I'm dealt 3 of a kind and no one in the table has my card, which is the house edge in buying for quads?
Quote: aluisioMy question...
Please see my post above yours.
Quote: WizardPlease see my post above yours.
I know you are the boss, but no ofense: I have already started a thread with this question without any answer. (Not that I assume that you must answer it, ok?)
Quote: brucelamonGold Coast has single deck $5 "Fun" 21 game at two tables with rules I can't remember completely but include: even money blackjack, diamond suited blackjack pays 2 to 1, player cards dealt face up, double or surrender on any number of cards (can't remember if early surrender allowed), five card 21 automatic winner, six card unbusted hand automatic winner, unlimited number of splits, unrestricted play on split aces. I see from the site that even money blackjack is -2.27% but I was surprised how often I was taking advantage of such things as surrendering a stiff double-downed hand v. a 10 or doubling on three card hands. Is there any chance this is a positive expectation game or even a good game?
No. It stinks.
Taking the rules in order:
Diamond suited blackjacks are only about 1/16th of all blackjacks, so you don't gain much by the extra payout.
Double on any number of cards is mildly beneficial, more so if doubles are allowed after splits.
It's probably late surrender, and that is a very small benefit since you only want to surrender in a few very specific situations anyway.
Five card 21 automatic winner isn't that great since the hand is rare, and you would win with it the vast majority of the time anyway.
Six card charlie is also pretty rare, and the gain from the automatic winner is small since you probably have a very good hand anyway.
Unlimited resplits are nice, but you only get the chance to resplit about 1/25 of the time.
Multiple hits on split aces is good. That adds about 0.1%.
Surrendering a double down hand vs. a 10 increases the winning chances of that hand from 22% to 25%. (Surrendering is equivalent to winning 1/4 of the time.) Not a particularly significant gain, especially since the situation is relatively rare.
I don't know the +EV values of most of these rules (some are found on the Wiz's website), but most of them give very small gains, due to the rarity of the hands in question. The loss of 1/2 a bet on blackjacks is a crusher; I wouldn't expect that you get back any more than 1% from all those favorable rules.
98Clubs
with their varying rules and paytables. Games such as russian poker and advanced caribbean stud poker and progressives ect.
