Stop Buying Crap #15 – Lottery Tickets
Posted by Cap on September 7, 2006 |Stop Buying Crap #5 | #6 | #7 | #8 | #9 | #10 | #11 | #12 | #13 | #14 | #15 | #16
Blasted Lottery Tickets
With odds ranging between 1 in 146,107,962 and 1 in 175,711,536; lottery tickets are the biggest load of crap ever. You will have a better chance of meeting galactic overlord Xenu than winning the lottery.
A few months back, in a survey that asked Americans what was the most practical way to accumulate wealth, 21% of Americans said “win the lottery.” I promptly popped a few blood vessel in an attempt to bury my deep-seated rage.
I understand completely that sometimes, you may get into the hype of a big jackpot and buy into a lottery pool along with your coworkers. Mmkay. Fine.
But if you’re buying lottery tickets regularly in the hopes of hitting the big one — you really need to look at the odds again. Here’s the kicker: you have a better chance of getting killed in a car accident, on the way to buy the lottery ticket, than you do at winning the lottery.
Pretty crappy odds people.
30 Comments to “Stop Buying Crap #15 – Lottery Tickets”
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September 7th, 2006 at 5:04 am
Amen…preach it.
September 7th, 2006 at 5:22 am
I don’t generally play the lottery for exactly those reasons, but I will always join in on an office pool. Not for good things like camraderie, fun, or greed, though; instead, I join in out of simple spite. I can not accept even the most miniscule possibility that I’ll be left out of the loop while my office mates hit the jackpot.
Does this make me a bad person?
September 7th, 2006 at 8:11 am
Yes…it does make you a bad person. Do not give into peer presure.
September 7th, 2006 at 9:13 am
1$ ticket per week, * 4 weeks in a month * 12 months = 48-50$ dollars a year. I think fast food is a bigger waster of money than the lottery, but I agree it’s worthless, just not as harmful as one would think.
However, I think “you have a better chance of getting killed in a car accident” isn’t the best description, considering people do get killed in car accidents almost every day. Perhaps getting killed in a plane crash would be a better comparison. You have more than a hundred times better chance of getting killed in a car accident then in a plane crash, whether a accident or not. I forget the exact figures though, but its vastly greater chance. (Over 100*)
September 7th, 2006 at 9:29 am
I agree about “the big game” tickets but I have actually won the scratch off ones several times, to the tune of hundreds of dollars. So I don’t mind spending a few bucks on those here and there. But not on a regular basis.
September 7th, 2006 at 9:40 am
My wife’s grandmother has hit a reasonable-sized jackpot twice — the first time was $500,000 and the second time was $20,000. Of course both of those were much less after taking the lump-sum and paying taxes. And when I found out how much she spends on lottery tickets I’m not sure she’s come out ahead even with those big scores.
I’m left wondering if some portion of the population simply does not believe they can save a couple hundred thousand dollars (some of them likely can’t). For those people the only way to get to several hundred thousand dollars of wealth may indeed be winning the lottery. Of course it’s a lot more likely they’ll end up with nothing.
September 7th, 2006 at 10:06 am
still scares the hell out of me on the off chance that my wife might win…
September 7th, 2006 at 11:11 am
Uh.. i kinda agree the odds of winning is almost nil.. however someone has to win.. and you can’t win without a ticket.. i say just buy one occasionally.. but only one.
September 7th, 2006 at 11:13 am
also… what about Mega Bucks at Las Vegas…whats your thoughts on that??? I know its way better odds than the lottery…
September 7th, 2006 at 1:20 pm
I totally agree. What a hideous waste of money. I learned to loathe the state lotteries as a form of “stupid tax” after watching my dad pour thousands of dollars a year and hours of his time into it. Sure, he’s won a few sizable pots occasionally, but I doubt it would ever offset 30+ years of weekly playing.
On the other hand, I do keep an eye out for lottery ticket coupons (we get them here in Seattle occasionally). A FREE chance to win scratch-offs or lottery money? I’ll take it!
September 7th, 2006 at 2:08 pm
The worst for me was when I was getting gas at the gas station. This guy in front of me bought $5 gas, $10 for cigs, and then $10 in powerball tickets. I felt sorry for him
September 7th, 2006 at 4:24 pm
http://www.wsu.edu/~brians/errors/deep.html
Occasionally, the jackpot balloons to extremely large sums. If the expected value of the payout exceeds the cost of the wager, wouldn’t an intelligent person elect to participate?
September 7th, 2006 at 4:41 pm
doh. at least I had the hyphen in.
Megabucks may have better odds than the two lottery I mentioned, but the odds are still pretty crummy compare to other forms of gambling. That’s not to say I support other form of gambling, it’s just.. you need to really need to distinguish for yourself if you view gambling as a form of entertainment or as a means to earn income. If its the latter, (and there are plenty who makes a living on gambling), people need to realize that state lotteries are not exactly one of the best way doing it.
Again, gambling is an iffy subject, but I can’t exactly say that people don’t make serious cash from table games such as poker etc. This isn’t about a couple of bucks now and then.. the post is mainly aimed toward the idea of regularly buying lottery tickets in the hope of cashing in. The odds just aren’t in your favor.
The accident odds is just the one I picked, I guess I should have went with the usual killed by lighting (or the killed in plane accident).. though I wanted something a bit more relatable. You’re right though, odds are pretty good with a car accident, though this is specifically a fatal one. I guess that’s still pretty good odds unfortunately. If someone can come up with a better example to really show the improbable odds of winning a lottery jackpot, let me know and I’ll change it :)
September 7th, 2006 at 5:13 pm
Mathhew,
Take a look at this analysis that I did on the lotto, here.
As you already know, since more than one person can win the lottery, that makes it a negative expected value bet almost all the time (plus taxes, taking a lump sum, etc).
September 7th, 2006 at 7:19 pm
Frank,
The expected value of a multiple-winner lottery can be estimated using a conditional Poisson probability distribution to accomodate the multiple winners. It’s reasonably straightforward to accomodate this hitch in one’s calculations. Taxes are even easier.
That’s not the point, though.
Once the payoff amount exceeds that magic threshold — after all the hitches have been accounted for — why wouldn’t an intelligent person take a wager with a positive expected value?
There’s a statistical explanation and an equivalent explenation that’s just common sense. I’m fishing for the latter.
September 7th, 2006 at 7:56 pm
Once the payoff amount exceeds that magic threshold — after all the hitches have been accounted for — why wouldn’t an intelligent person take a wager with a positive expected value?
Of course, I would take it if it was a positive expected value bet. However, I contend that it will never get to that threshold, after you take into account all those factors because they are all substantial negative factors.
On a more humorous note, I recall when the powerball was up to $300+ million and I was mentioning to a co-worker that it was still negative value because of tax purposes, etc. His idea, buy a ticket as an investment in his Roth IRA, to shelter him from the taxes. I thought it was a hilarious suggestion.
September 7th, 2006 at 7:59 pm
Also, what’s a conditional poisson distribution, I’m only familiar with a plain poisson distribution.
September 7th, 2006 at 8:43 pm
I love the Roth IRA distribution idea — that’s hilarious.
The number of winners in a lottery is given by a Poisson distribution. Since the payout is dependent on the number of winners, we must calculate the probability of other winners, GIVEN THE ASSUMPTION that you have won. That’s the conditional probability. The expected value of your ticket is the chance-weighted probability of all the permutations of winners/payouts.
As I recall, given 50MM tickets sold, the lottery has to exceed about $350MM before the expected value (post taxes, post pot-splitting) goes positive.
EV’s aren’t useful until the Law of Large Numbers begins to kick in though. ;)
September 7th, 2006 at 9:27 pm
Alright I looked up poisson distribution and closed the windows the minute I read a few minute into the math explanations :P
I can however understand positive expected value, something that goes through my head every time right after the flop, during a poker hand.
Sure, I’ll participate. How much will I participate? *shrug*
Let’s not get too carry away with these probability now. It hurts my head.
September 7th, 2006 at 9:46 pm
I smell a post coming up :P
September 9th, 2006 at 6:04 pm
Ok ok… i want to update y’all disbelievers out there!!
check this woman out who one twice in a row!!
http://news.yahoo.com/s/ap/double_lottery_winner;_ylt=AkZTrFLWJQ0plxeW5R7EUEUDW7oF;_ylu=X3oDMTBhcmljNmVhBHNlYwNtcm5ld3M-
January 31st, 2007 at 7:58 am
I think it is just sad really. You go into a convenience store and see people who look like they can’t afford their next meal, yet they are buying $40 worth of lottery tickets.
February 20th, 2007 at 7:03 am
If viewed as a form of entertainment not as a money making investment the lottery is fine. I have no problem spending $1 for an afternoon of dreaming and planning. As long as I keep my perspective and realize that all of this is imaginary I think it was money well spent. Afterall I spend much more on a movie ticket for two hours of someone elses imagination, why not spend a dollar on my own dreams. Just don’t play unless you can afford to spend the money. I don’t go to the movies when I can’t afford it and I don’t buy lottery tickets when I can’t afford it.l
April 25th, 2007 at 7:24 am
I know two different people who have both been hit by lightening twice.
All I can think is that maybe they should play the lottery.
I’ll kick in a buck at the office if it’s for some huge pot, but it’s more for being part of the group and sharing an afternoon’s fantasy.
June 2nd, 2009 at 12:58 pm
im doing a debate on this about stopping the lottery. its such a waste of money! why even need it? the rich people always win anyways!
March 11th, 2010 at 5:28 pm
Lottery is a tax on people who can’t do math.
Basically, people buy lottery tickets because their stupid.
March 11th, 2010 at 9:23 pm
Did you know that it is more likely for you to be in a plane crash than to win the lottery? Talk about odds.
September 4th, 2011 at 11:48 pm
In Australia, profits made by the lottery commission go to hospitals. Seems to be a good trade off to me.
September 13th, 2011 at 11:57 am
@Jacob: huh did not know that. for my state lottery I think portions of its proceed does go to public endeavors but thats also why some people call it a “stupid tax.”