Author Topic: Why playing the lottery is INSANE...  (Read 18708 times)

a1smith

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Re: Why playing the lottery is INSANE...
« Reply #50 on: April 20, 2015, 07:51:05 PM »
There were, and occasionally still are, some state-run games in which you can get a statistical return of more than the money you put in. Generally, this either relies on a flaw in a random generator for the game (where things are not actually random), or a game in which a large sum of money gives you good chances of coming out ahead (for example, where if you buy enough different tickets, you are statistically more likely than not to win the jackpot + various 2nd and 3rd tier prizes.)

But unless you have a strong math background and a lot of cash and enough luck to find such a game, you're wasting your dollars.

But at least those dollars partly go into educating kids into what statistics are and how they can help you not buy lottery tickets.

Sure, expected value is sometimes greater than cost of ticket when jackpot gets really high but typically that assumes one winner.  When the pot gets that high you usually have multiple winners. And, expected value is just the mean value, you can still have all losing tickets.  Your winnings approach the mean value per ticket, as you said, "if you buy enough different tickets."  Lots of them.

The lottery dollars don't help pay for education because the politicians put the lottery money into education funds, as promised, but then pull out an equal amount to fund their other pet projects.  More "new math", "smoke and mirrors", etc.

jmusic

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Re: Why playing the lottery is INSANE...
« Reply #51 on: April 20, 2015, 08:35:46 PM »
There were, and occasionally still are, some state-run games in which you can get a statistical return of more than the money you put in. Generally, this either relies on a flaw in a random generator for the game (where things are not actually random), or a game in which a large sum of money gives you good chances of coming out ahead (for example, where if you buy enough different tickets, you are statistically more likely than not to win the jackpot + various 2nd and 3rd tier prizes.)

But unless you have a strong math background and a lot of cash and enough luck to find such a game, you're wasting your dollars.

But at least those dollars partly go into educating kids into what statistics are and how they can help you not buy lottery tickets.

Sure, expected value is sometimes greater than cost of ticket when jackpot gets really high but typically that assumes one winner.  When the pot gets that high you usually have multiple winners. And, expected value is just the mean value, you can still have all losing tickets.  Your winnings approach the mean value per ticket, as you said, "if you buy enough different tickets."  Lots of them.

The lottery dollars don't help pay for education because the politicians put the lottery money into education funds, as promised, but then pull out an equal amount to fund their other pet projects.  More "new math", "smoke and mirrors", etc.

OP here... I'm surprised this thread is still alive! 

Regarding the cases where the expected return > cost, this did happen a few years ago with MIT students...

http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/

I'm sure most lottery operators these days are aware of the proliferation of math whizzes and ever more powerful computers, so they're very careful to avoid these scenarios.  Not saying that opportunities will never happen again, just that it's probably not worth the time invested to look for them...

Giro

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Re: Why playing the lottery is INSANE...
« Reply #52 on: April 21, 2015, 07:26:05 AM »
I saw this thread title yesterday and it reminded me that I had some lottery tickets at home from 2 Christmas' ago that my kids had been gifted.  I cashed them in last night at the gas station. 

I have $12.  Well, it's really their $12 but they long forgot about them.  haha

Davids

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Re: Why playing the lottery is INSANE...
« Reply #53 on: April 21, 2015, 08:15:47 AM »
When powerball or megamillions gets ridiculously high then i spend a dollar or 2 on a lotto ticket. I view it as a cost to daydream. It is once in awhile so if I must turn in my mustachian card as a result then so be it.

Psychstache

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Re: Why playing the lottery is INSANE...
« Reply #54 on: April 21, 2015, 08:30:53 AM »
There were, and occasionally still are, some state-run games in which you can get a statistical return of more than the money you put in. Generally, this either relies on a flaw in a random generator for the game (where things are not actually random), or a game in which a large sum of money gives you good chances of coming out ahead (for example, where if you buy enough different tickets, you are statistically more likely than not to win the jackpot + various 2nd and 3rd tier prizes.)

But unless you have a strong math background and a lot of cash and enough luck to find such a game, you're wasting your dollars.

But at least those dollars partly go into educating kids into what statistics are and how they can help you not buy lottery tickets.

Sure, expected value is sometimes greater than cost of ticket when jackpot gets really high but typically that assumes one winner.  When the pot gets that high you usually have multiple winners. And, expected value is just the mean value, you can still have all losing tickets.  Your winnings approach the mean value per ticket, as you said, "if you buy enough different tickets."  Lots of them.

The lottery dollars don't help pay for education because the politicians put the lottery money into education funds, as promised, but then pull out an equal amount to fund their other pet projects.  More "new math", "smoke and mirrors", etc.

OP here... I'm surprised this thread is still alive! 

Regarding the cases where the expected return > cost, this did happen a few years ago with MIT students...

http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/

I'm sure most lottery operators these days are aware of the proliferation of math whizzes and ever more powerful computers, so they're very careful to avoid these scenarios.  Not saying that opportunities will never happen again, just that it's probably not worth the time invested to look for them...

For an fun read on this (and other interesting situations involving math) I highly recommend Jordan Ellenburg's How Not to Be Wrong: The Power of Mathematical Thinking

Jschange

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Re: Why playing the lottery is INSANE...
« Reply #55 on: April 21, 2015, 08:32:13 PM »
So what if someone wants to spend a couple bucks a month on lottery tickets? I don't see the big deal. Dave Ramsey gets all worked up over lottery tickets too, and I just don't understand who he's talking to when he starts up on it. Is he imagining someone who invests in lottery tickets, or buys large numbers of them with the expectation of actually winning? Because I didn't know such a person existed. Instead he ends up aggravating me by lecturing me about how I spend occasional pocket change. If I bought two soda pops a month instead of lottery tickets, would that be better somehow?

As a student, I sold lottery tickets in two different cities. You get 'regulars' spending $50-1500/week. And you know they can't afford it. I don't think I could stomach it again.

That said, I spend $10-15 a year, buying a $2-5 ticket every few months. I do not check it for a few months, and enjoy spending the money in my head. A common theme walking away from a want in a store is to say to myself "won't it be funny when I realise I won the lottery a month before I didn't buy another pink shirt? I wonder if it'll be on clearance when I finally claim my cash". I also like to imagine the least amount of money I can win to FIRE myself, ship a few friends and relatives closer to me for a catch up vacation, etc. It is a luxury, like a fine novel/the 10$ in late fees to the library I budget each year. Both stimulate my imagination.

A lot of truth there. Somebody who spends 5 bucks a month on tickets as opposed to $5 a day on lattes, well, at least the lotto player has the hope of getting something out of it...odds aren't good but it does still happen.
I think ranting is more directed at folks who use lottery as a substitute for real wealth planning, which is why both are common amongst working classes--the I don't have enough money to save or invest, but someday my ship will come in mentality...

There are definitely people who spend a significant amount of money that they can't afford on lottery tickets.  These are the people that inspire so much ire from the financial guru types.

I was stuck in a gas station line for like 20 minutes once behind a pair of young women who collectively spent over $200 on a variety of scratch offs and other tickets, and of course they had to pick numbers for each one and kept changing their minds about what they wanted.  Based on the cashier's comments after they left, this was a fairly regular occurrence.  It also happened to be a Friday, so I'm guessing they did this every paycheck. 

I think that's a lot different than my aunt, for example, who has a great state pension and a 401k on top of that, doesn't mind her job, and spends maybe $10 a month, every month on the lottery.  She still makes the jokes about how she can't retire unless she wins it, but that's not really true.  She's also been working since she was 12 years old (and is over 60 now) and legitimately can't fathom the idea of not doing something resembling work until she dies -- her goal is to do part time non profit stuff, but even if she volunteered she would view it/treat it as a job.  I wish she wouldn't, but I can't shame her for it like I can the two girls I mentioned above.

rocketpj

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Re: Why playing the lottery is INSANE...
« Reply #56 on: April 22, 2015, 03:58:41 PM »
My old office used to do a lottery pool.  I always contributed for two reasons:

1.  To be a part of the gang
2.  Because I didn't want to be the one chump left at his desk when they all won - being smugly right about the odds wouldn't have been worth that feeling.

Overall I probably spent about $100 over 5 years (it was an on and off thing).  Worth it, though we never won.

My high school teachers all won in a collective lottery pool a few years after I graduated.  They then immediately began suing each other and otherwise being utterly shitty people for the next few years.

Hunny156

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Re: Why playing the lottery is INSANE...
« Reply #57 on: April 23, 2015, 09:32:20 AM »
My Dad could easily afford it, but he had a $20/week lottery habit.  As a young teen, he'd hand me a $20 and ask me to go play lotto for him.  The storekeeper knew us, so he'd process it for me, no problem.  Then again, I also used to buy cigs for Daddy when he smoked, and I was like 8, but that's a different story...

Anyhow, as I got older and realized what a bad idea the lotto was, I would take the money and not actually play, but I did keep the results to prove that Dad wasn't gonna win anyhow.  After a while, I gave him back his "winnings" by not playing, along with the results of the non-played games.  He didn't seem to know what to do about it, so he gave me some of the money and rarely played lotto after that!  I saved that cash too, I used to get a thrill out of pulling out all my bills and coins and just counting them.

Guess I had some mustachian tendencies even as a little girl.  ;)

dsmexpat

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Re: Why playing the lottery is INSANE...
« Reply #58 on: April 23, 2015, 11:13:39 AM »
If he won though....

Hunny156

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Re: Why playing the lottery is INSANE...
« Reply #59 on: April 23, 2015, 11:39:12 AM »
If he won though....

LOL, my parents were the worst with that stuff.  If they saw a picture in the newspaper with a license plate number visible, they would play that, b/c a "friend of a friend" would do that and won all the time.  For all the years he did play, he barely hit three numbers, and most of the time, he would never check his tickets.  Eventually I'd pull a pile out of his wallet and check for him, but I'm sure he lost a few along the way.

My mom always said my dad was a huge spender until she came around.  Knowing what I know now, she was good with money, but she ain't got nothing on me and my mustachian ways!  She would think I am crazy...

gimp

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Re: Why playing the lottery is INSANE...
« Reply #60 on: April 23, 2015, 01:59:35 PM »
Regarding the cases where the expected return > cost, this did happen a few years ago with MIT students...

http://newsfeed.time.com/2012/08/07/how-mit-students-scammed-the-massachusetts-lottery-for-8-million/

I'm sure most lottery operators these days are aware of the proliferation of math whizzes and ever more powerful computers, so they're very careful to avoid these scenarios.  Not saying that opportunities will never happen again, just that it's probably not worth the time invested to look for them...

Yep. I'm not talking about powerball, I'm talking about those weird edge cases where someone fucks up and someone else figures out how to take advantage of it. It's pretty cool to read about. But I would never put my own money into such a scheme.

EricL

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Re: Why playing the lottery is INSANE...
« Reply #61 on: April 23, 2015, 02:07:38 PM »
A Kiwi friend tells me the New Zealand lottery is pretty decent because there's only 4 million on the island.  A 1 in 4 million chance isn't going to get him to blow his life savings on it.*  But it's far better odds than US lotteries and makes the occasional purchase palatable.

* 1 in 4 mil because NZ does have plenty of silly people to make up for invalids, children, Mustachians, etc who can't/won't buy them.

Laura

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Re: Why playing the lottery is INSANE...
« Reply #62 on: April 23, 2015, 05:02:46 PM »
I, personally, don't think it's a big deal to spend a few bucks on the lottery each month. Although, there are definitely people who spend tons of money on scratch tickets each month and that is over the top.

I am in a Mega Millions pool at my work. I pay $10 every 5 weeks. It's worth it, in my opinion. Paying that money isn't breaking my budget, and it's fun to daydream with my co-workers about how empty the office would be once we all hit the jackpot and quit our jobs lol. Although, I do admit that at this point in the office pool, I have been doing it so long that I cannot quit now. We have been doing it for about 3 years and if there was ever a time where I said I didn't want to be in for one round and then they ended up winning that jackpot when I wasn't in on it, then I'm pretty sure I'd have to kill myself. So, that fear of possibly missing out on the Big Win does make me keep contributing my $10 every 5 weeks lol. I usually only buy my own separate Mega Millions or Powerball ticket when the jackpot gets really large.

shelfins

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Re: Why playing the lottery is INSANE...
« Reply #63 on: May 01, 2015, 02:19:19 PM »
I don't think anyone thinks it's a real problem for people to buy a ticket or two a month if you have the money to spend; that's a harmless indulgence. But I think most people don't realize that most lottery tickets are being bought by people who are spending tons of money from their very limited resources. Think about it: Americans spend $68 billion on the lottery each year, and there are only 320 million Americans. That's $200 a year on lottery tickets for every man, woman, and child in the country. Now think of all the people you know, like me, who spend $0 on lottery tickets a year, or the people who are buying a ticket every once in a blue moon, who are spending maybe $20 or $40 a year. So someone else is buying their share. And, believe me, the people who are buying all those extra lottery tickets are not the FI people with money to burn, because if you're already FI, why would you bother playing the lottery? It's poor people who are bringing in maybe $400 a week, and then going and spending $30 or $40 of that on lottery tickets on payday, because they don't see any other way out of their financial problems and don't realize just how bad the odds are. And that makes up a LOT more of lottery ticket purchases than most oh-i'll-buy-a-ticket-on-my-birthday casual office worker players realize. It is a tax on the poor, and I think it's awful. Not 100% sure it should be banned, for the reasons mentioned above, but at the least states shouldn't be spending millions of dollars advertising it trying to convince people to part with their hard-earned money, because, hey, it could be you!

rencelas

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Re: Why playing the lottery is INSANE...
« Reply #64 on: May 02, 2015, 07:02:42 AM »
When powerball or megamillions gets ridiculously high then i spend a dollar or 2 on a lotto ticket. I view it as a cost to daydream. It is once in awhile so if I must turn in my mustachian card as a result then so be it.

This. $2 a couple times a year has absolutely no impact on my life or future.