Author Topic: We Spent all our money on Powerball tickets, so please Go Fund Me!  (Read 6158 times)

Stashaholic

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Holy crap! They raised several hundred too!

https://www.yahoo.com/music/powerball-reimbursement-fund-page-created-235504618.html

"Please help me and my family as we have exausted all of our funds. We spent all of our money on lottery tickets (expecting to win the 1.5 billion) and are now in dire need of cash. With your small donation of at least $1.00, a like  and one share, Im certain that we will be able to pick ourselves up from the trenches of this lost and spend another fortune trying to hit it big again! PLEASE, wont you help a family in need. DONATE NOW."

onlykelsey

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #1 on: January 15, 2016, 09:44:41 AM »
I saw that!!!!!!!!!!!!!!!

We should have a system like i've seen in Canada, where you have to prove you understand basic math in order to participate in the lottery.

Magilla

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #2 on: January 15, 2016, 09:48:55 AM »
This can't be serious... I mean it must be a sarcastic Onion like thing, right? Right?!?!?

Khaetra

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #3 on: January 15, 2016, 10:03:17 AM »
Don't laugh.  My neighbors, who aren't very bright to begin with, took everything they thought that had value to the pawn shop to buy tickets for the Saturday drawing (before it rolled over to $1B).  Now they are complaining about not having any money.

onlykelsey

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #4 on: January 15, 2016, 10:05:18 AM »
Quote
My neighbors, who aren't very bright to begin with, took everything they thought that had value to the pawn shop to buy tickets for the Saturday drawing (before it rolled over to $1B).  Now they are complaining about not having any money.


AHHHHHHHHHHHHH Why are Americans so lazy?  We are always looking for a quick fix. 

MrsDinero

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #5 on: January 15, 2016, 10:11:58 AM »
I found out my SO bought $10 worth of tickets....we didn't win.

He was telling me the guy in line ahead of him was buying $1000 worth of tickets!  He also said it sounded like his man made multiple trips to the store to buy the tickets!

Her

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #6 on: January 15, 2016, 10:23:13 AM »
The campaign doesn't exist anymore, but part of the description apparently said, "With your small donation of at least $1.00, a like  and one share, Im certain that we will be able to pick ourselves up from the trenches of this lost and spend another fortune trying to hit it big again!" I'm 99% sure whoever made the campaign was just trolling and trying to fleece people for fun.

Making Cookies

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #7 on: January 15, 2016, 10:29:49 AM »
My coworker who makes ~$7.50 said that she was considering spending $800 on the lottery.

This was right after realizing that her "friend" was trying to get her to join a MLM (which coworker did not understand) for $800 and telling me that she couldn't afford to spend $800 on that.

A little reading can fix problems like that.

The Guru

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #8 on: January 15, 2016, 11:19:35 AM »
This is the part that floors me:

"We spent all of our money on lottery tickets (expecting to win the 1.5 billion)"

Unbelievable.

tobitonic

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #9 on: January 15, 2016, 11:21:53 PM »
Oh my...

Cathy

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #10 on: January 15, 2016, 11:42:56 PM »
We should have a system like i've seen in Canada, where you have to prove you understand basic math in order to participate in the lottery.

I've never heard of such a requirement.

Under the federal Criminal Code, RSC 1985, c C-46 ("Code"), it is generally illegal to run, or to participate in, certain "games of chance", subject to various conditions and exceptions. Code 206. Operators of promotional contests (otherwise known as "sweepstakes") in Canada frequently ensure that a "skill-testing question" is part of the contest to decrease the chance that the contest will be found to be an illegal game of chance (but note that this may not be enough by itself; the statute is complicated). However, provincial governments are exempt from this statute, so long as the provincial lottery is operated "in accordance with any law enacted by the legislature of that province". Code 207(1)(a). Hence, a skill-testing question does not need to be a part of a provincial lottery.

It would presumably be open to a provincial legislature to require a math test as a condition of purchasing a lottery ticket, but I haven't found evidence that any such requirements exist.

My favourite Canadian lottery litigation is Montreal (City) v. Quebec (Attorney General), [1970] SCR 332. The case concerned the legality of a "voluntary tax" proposed by the City of Montreal. Under the scheme, residents of Montreal who made "voluntary tax" payments to the city would be entered into a drawing to win certain prizes. According to the City of Montreal, this scheme was definitely not an illegal game of chance, but was merely a tax. The Supreme Court of Canada was not impressed with the scheme and ruled that it was criminal.
« Last Edit: January 16, 2016, 12:26:09 AM by Cathy »

vern

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #11 on: January 16, 2016, 01:14:35 AM »
"The Lottery, with its weekly pay-out of enormous prizes, was the one public event to which the proles paid serious attention. It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne, their intellectual stimulant. Where the Lottery was concerned, even people who could barely read and write seemed capable of intricate calculations and staggering feats of memory."

George Orwell

MgoSam

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #12 on: January 16, 2016, 02:48:03 AM »
I didn't buy any lottery tickets, I actually thought about buying a ticket but didn't end up going for gas so didn't bother making a special trip (even when there is a gas station everywhere). I'm just sad at how much people have spent on this lottery, but yeah I honestly don't know how to react when I read about people putting all their disposable income into things such as this.

I remember when I was in college, I would buy a lottery ticket before finals, it was a fun little thing that cost me only a dollar, I can't recall buying more than one ticket at a time, but it was kinda like a stupid little 'backup plan,' in case I didn't do well on my test. I never won anything, of course, and I am doing fairly well for myself. I shudder to think about the future of many other people though, who will not fair so well as I am, and who have squandered so much of their finite resources on such a gamble.

FIRE me

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #13 on: January 16, 2016, 07:25:03 PM »
Don't laugh.  My neighbors, who aren't very bright to begin with, took everything they thought that had value to the pawn shop to buy tickets for the Saturday drawing (before it rolled over to $1B).  Now they are complaining about not having any money.

So sad, and yet so amusing. I have to laugh. Maybe I'm a bad person for finding it to be funny.

MustardTiger

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #14 on: January 17, 2016, 05:43:53 PM »
I spent 10$ and won 8!  A quick EV calculation told me that it was likely +ev to a small degree and its a fun sweat.

Cathy

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #15 on: January 17, 2016, 07:18:36 PM »
I spent 10$ and won 8!  A quick EV calculation told me that it was likely +ev to a small degree and its a fun sweat.

Your calculation was likely wrong, but more importantly, expected value alone is not predictive of whether a low-odds game of chance is worth playing unless (a) you have the option to play the game a large number of times in a row, and (b) you actually play the game a large number of times in a row. The one-off large powerball jackpot already fails condition (a), so expected value by itself was not an indicator of whether a ticket was worth purchasing.

Here's an illustration of the above principles of basic math. Suppose I offer to sell you a ticket for $2 with the following properties: 99.9999999% of the time you win nothing, but the rest of the time you win 2.1 billion dollars. The expected value of this ticket slightly exceeds its price, so it must be a shrewd investment, right? Wrong. You have a 99.9999999% chance of losing money. Assuming there is a drawing every day with the same odds, if you bought a ticket every day for about 2.7 million years, you would still have more than a 50% chance of losing money overall.

You might think that you can increase your absolute chance of winning by buying a lot of tickets, or by pooling your money with other persons. You can do that, but then you run into a different but related problem with relying on expected values. Building on my game above, suppose I told you that instead of paying me $2 for a 0.0000001% chance to win, you could pay me as much as you want ($x) and your chance to win the $2.1 billion would be given by (x/2 * 0.0000001)%, up to a maximum of a 50% chance. Under this new game, if you pay me $1 billion, you have a 50% chance to win $2.1 billion and a 50% chance to walk away with nothing. The odds of 50% aren't bad, but you're risking $1 billion. This is unlikely to be worth it unless you are some sort of institutional entity with a lot of money to blow.
« Last Edit: January 17, 2016, 11:06:48 PM by Cathy »

Hey It's Me

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #16 on: January 18, 2016, 10:12:44 AM »
For those who want to see the campaign, here is a Google cached version of the page, which is still up. You can't hide from Google, lady!

bobechs

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #17 on: February 01, 2016, 12:36:13 PM »
Don't laugh.  My neighbors, who aren't very bright to begin with, took everything they thought that had value to the pawn shop to buy tickets for the Saturday drawing (before it rolled over to $1B).  Now they are complaining about not having any money.

But they have decluttered.  Isn't that supposed to be an uber-good thing?

Now all they have to do is organize their losing tickets by numerical order in a set of Kondonian joy-creating identical boxes and start looking for a stochastic pattern.

shotgunwilly

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #18 on: February 02, 2016, 10:39:58 AM »
Building on my game above, suppose I told you that instead of paying me $2 for a 0.0000001% chance to win, you could pay me as much as you want ($x) and your chance to win the $2.1 billion would be given by (x/2 * 0.0000001)%, up to a maximum of a 50% chance. Under this new game, if you pay me $1 billion, you have a 50% chance to win $2.1 billion and a 50% chance to walk away with nothing. The odds of 50% aren't bad, but you're risking $1 billion. This is unlikely to be worth it unless you are some sort of institutional entity with a lot of money to blow.

Except in your game you're not even considering the limits on possible number combinations.  You could purchase every single # combo possible (if it were feasible) and you are guaranteed a win. Not a 50% chance.  There are 292,201,338 possible number combinations and at $2 a ticket you spend $584,402,676.  To win $1.6 billion, or $950 mill cash offer (or whatever the hell it was) it would appear to be +EV.  Paying taxes and the chance of someone else also winning with the same numbers have a negative effect on EV while the other non jackpot prizes have a positive effect on EV.  It's probably close to being +EV.

Cathy

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #19 on: February 02, 2016, 08:27:08 PM »
Building on my game above, suppose I told you that instead of paying me $2 for a 0.0000001% chance to win, you could pay me as much as you want ($x) and your chance to win the $2.1 billion would be given by (x/2 * 0.0000001)%, up to a maximum of a 50% chance. Under this new game, if you pay me $1 billion, you have a 50% chance to win $2.1 billion and a 50% chance to walk away with nothing. The odds of 50% aren't bad, but you're risking $1 billion. This is unlikely to be worth it unless you are some sort of institutional entity with a lot of money to blow.

Except in your game you're not even considering the limits on possible number combinations.  You could purchase every single # combo possible (if it were feasible) and you are guaranteed a win. Not a 50% chance.

This was handled in my construction of the problem. Note the bolded part above where I specifically said that no matter how much you pay me, your chance of winning does not exceed 50%.

If your point is just that my example is different from a real lottery, I was aware of that. However, the same issue is present in the real lottery. In the real lottery, if you buy every number, you are guaranteed a win, but you aren't guaranteed a profit because the pot could be split arbitrarily many ways. It then becomes a question of whether it's worth risking the insane amount of money required to buy every ticket even though that procedure is not guaranteed to yield a profit. As you'll recall, that's the same issue you faced in my example.

To restate both points of my original post, here is why a slight expected value does not mean that it is rational to purchase a lottery ticket:
  • If you buy a small number of tickets, your chance of winning is approximately zero regardless of the expected value. Therefore, a positive expected value does not mean it is rational to buy a small number of tickets.
  • If you buy a large number of tickets, you can engineer a high chance of profit, but at the risk of losing a massively huge investment. This is unlikely to be a rational trade for non-institutional entities (and usually not even for institutional entities).

My simplified lottery illustrated both points. Those points also apply to the real lottery (except that the real lottery is unlikely to have a positive expected value in the first place). My core thesis remains true: a positive expected value does not mean that it is rational to buy a lottery ticket. The person I responded to above seemingly believed that the expected value of a ticket was the main determining factor in whether it is rational to purchase one. That is very wrong.


...It's probably close to being +EV.

The whole point of my posts in this thread is that even if that is true, it was still totally irrational to purchase a ticket. It was not in any way mathematically justifiable, regardless of the alleged expected value. Relying on expected value as the sole predictor of whether it is rational to purchase a lottery ticket is like relying on AAPL stock as your sole store of value for retirement savings: it should be part of the calculus, but only a small part.

Expected values by themselves are a good guide to rationality only in certain narrow circumstances, usually involving a game that (a) can be played repeatedly with the same odds each time, (b) requires only a small investment for each attempt, and (c) offers pretty decent chances of winning on any one attempt. In other situations, expected value has less relevance to rationality. In the context of the celebrated powerball drawing, expected value had pretty much no relevance to whether it was rational to buy a ticket.
« Last Edit: February 02, 2016, 08:57:29 PM by Cathy »

Doubleh

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Re: We Spent all our money on Powerball tickets, so please Go Fund Me!
« Reply #20 on: February 03, 2016, 02:11:08 AM »
I think Cathys analysis is as usual on the money.

Anyone interested in this should listen to the recent planet money podcast about a guy who actually did buy all tickets and win several lotteries around the world including a state lottery in the US and apparently managed to make a decent amount doing so. His take was that the number of combinations in most lotteries now made the exercise logistically unfeasible and it was unlikely to be repeated.