Here’s $100. Can you win $800M at Powerball?
graphics.latimes.com
graphics.latimes.com
A movie costs $12 in a theater for 2 hrs of enjoyment. A lottery ticket costs $1 for a week of intermittent enjoyment. For certain segments of the population, a lottery ticket is a downright bargain.
Math problems are easy. Real world problems are difficult.
As an aside, it's so important that people who care enough about a social challenge like the lottery/gambling addiction are able to find the ACTUAL root cause to address. I'm not blaming the LA Times. I LOVE content like this - and not all content needs a purpose. BUT - if the purpose was supposed to be helping people who play the lottery see their folly, this probably isn't the right tack.
It's radio lotteries. You send them text (paid). And they pick few people to call back and to inform them that they won.
It's very easy to argue that the fantasy helps people de-stress and ends up improving their lives.
Studies have found that depressed people are better at estimating odds. There's decent evidence that too much reality is bad for your emotional well being.
The second article is even easier to dismiss. To generate excitement the buy in has to be high enough that people feel a bit invested, and the result has to be quick enough that people don't loose interest.
Maybe for someone making six figures in the bay area.
In high school, I worked as a stock boy in a convenience/liquor store in a blue collar midwest town. It was obvious a large percentage of the buyers of lotto tickets really couldn't afford to do so.
It's not a popular opinion, but imho, the lottery is little more an government-sponsored exploration of the economically disadvantaged.
You probably meant "exploitation" rather than "exploration".
I've heard it phrased a little differently: The lottery is a voluntary tax on the stupid.
A slightly different phrasing: The lottery is a voluntary tax on the innumerate.
BTW I did purchase two Powerball tickets a few hours ago. Wish me luck!
I don't think probability is communicative, is it?
EDIT: It would also be neat to simulate the number of winners you would have to share the prize with, based on numbers entered in the form from users.
I'm not doing this in reality (I spent $2 for a pool, woo), but I'm curious to see it simulated.
They ask you to comment if you won. Their program guarantees you lose when it terminates -- even if you hit the 1:292,000,000 odds.
It is not mathematically provable that a random walk of finite length will eventually touch 0. Proof by counterexample: the set of every walk of length 1 where you win the jackpot on your first try.
However, consider an infinite random walk. You can fix the first n values of the walk to win the jackpot as much as you want, but as the random walk progresses toward infinity, it is highly probable that you will be on a random walk that tends toward negative infinity. (You might have to play a lot; $437 million of $3 tickets would probably be enough tickets to play powerball for a few lifetimes.)
Playing 10,000 times in 1 drawing gives you the probability of winning the jackpot:
0.00003422297813=10000/292201338
Playing 10,000 times in 10,000 drawings gives you the probability of winning the jackpot:
0.00003422239258=1-((292201338-1)/292201338)^10000
The difference gets more significant if you play more. For 10 million plays its:
.0342 vs .0336
If you play only 100 times the probability of a jackpot is the same to 7 significant digits.
-edit I put it on $1M and let it run. I hit the 5 numbers, $1M prize, at some point around $150k spent.
It approaches 1.0 as you buy more tickets, but even at $800m, the lump sum payout of $491m is still lower than the cost of buying all possible $2 tickets ($584m).
And even if you could buy all tickets you still might have to split the winnings...
You also have to subtract taxes from the payout, which also eats into the payout. I would expect it would be 30% or higher, depending on how much you spend on a tax lawyer (which, of course, cuts into the payout as well).
The only[1] way to win is to not play.
[1] Odds are 292,201,338 to 1 of winning by not playing.
For an extreme example, consider a lottery with only one number, selected from 1 to 2, costing $1 per ticket, with a $2 jackpot.
Buy 2 tickets at once, you lose $2 on tickets, and you get $2 back. Expected net return, $0 (with probability 100%).
Buy 1 ticket per draw for 2 draws, and you have a 1/4 chance of winning nothing (net -$2), a 1/4 chance of winning both jackpots (net +$2), and a 2/4 chance of winning one and losing one (net $0). Same expected value.
Of course, in a real lottery, usually[0] the expected value is negative. So what's happening is like anti-insurance. In both cases your expected value is negative, but you pay the insurance company money to lower your variance, and you pay the lottery money to raise your variance.
[0] Usually? Well, in theory with a cumulative jackpot the jackpot might get high enough to make the expected value positive... except that usually as the jackpot rises, the number of players rises too, such that you have to take into account the possibility of having the split the jackpot, which of course would cut your take in half, or worse.
Spend 10 minutes imagining what you'd do with $496M. It might be fun.
I joked that there was now a 292.2 million to 1 chance that tomorrow, he'd want to jump off of a bridge.
Fortunately for him, we didn't win anything.
I usually forget about the ticket soon after I buy it. I had my fun dreaming and I don't really need to wait for the draw to absorb jolt of disappointment. I know I haven't won without checking.
The Mega Millions games has 1:14.71 odds of winning. I'll play both Powerball and MM once or twice a year and my loose accounting on my winnings lands me around +$4. Basically nothing over the years but I have enjoyed the frenzy.
I don't think I fall into "stupid tax" territory and I do understand the probability of a jackpot win. I just don't care about it and enjoy the little rush of the chance.
While the large jackpot prize may be tempting, it's extremely hard to have that one ticket in 292 million.
I think my favorite part is that extremely hard isn't a very accurate description of how unlikely it is.
[0] A quick Google returns a number of sources, but I'm going to use this one: http://www.elvisnews.com/news.aspx/gamblers-give-up-on-elvis...
A car goes from San Diego to New Orleans and the driver throws a quarter out of his window at some point in time.
Now you drive the same route. You get the chance to stop once on this route. If your front tire comes to a halt at the exact same spot of that quarter, you hit the jackpot.
How likely does that feel?
People do win lotteries at times, don't they?
I'm really curious what RNG the registers use when people say "let the computer guess for me". I'm pretty sure they don't all have a TRNG installed on the circuit...
I can point you in the direction of the MontaVista Linux distribution, which is what most of the terminals run.
Why shouldn't they? It's to the lottery's benefit. Two reasons:
1) People are attached to "their" numbers, and would be very upset if you didn't let them pick exactly the ones they want. Alienated players equals lower participation.
2) There are more overlaps when people pick than when the computer picks. Which means that, each drawing, there is a lower probability of someone hitting the jackpot than if all numbers are distinct. Which means the money rolls over and the next drawing has a larger prize. Eventually the prize is $800 million and people get excited and buy even more tickets. It's even being discussed on HN.
I can see the method impacting the number of dollars you win but surely any valid set of numbers has the same chance to win as any other.
It's not like your TRNG is actually emulating the behavior of the balls in the machine.
Build website to crowdsource $292,201,338. Buy all the lotto tickets. Pay back investors 150% of their investment. Make ~ $69.5M.
(assuming lotto tickets are a $1) (someone else can figure out the break even point after taxes)
It's the real free money part!
If you spent $500 million on tickets and won $800 million, your tax liability would only be on the $300 million profit.
Crowdsource ~$146 million and only buy half the lotto tickets. For each of the ~11 million combinations of regular numbers, buy 13 tickets covering half the possible powerball numbers.
Assume you win the $800 million jackpot and lose 50% to taxes, you have $400 million left over. You spend ~$292 million to double your investors money and have ~$107 million left over.
Assume you don't win the $800 million jackpot, you still have 13 $1 million tickets left over. You can either pay that back to your investors, or keep it for yourself and point to a clause in a contract they signed saying that you'd only pay out if you won the jackpot.
Somehow I doubt it's legal to do something like that, but it's interesting nonetheless.
Gambling losses are tax deductible as expenses against gambling winnings.
Going with your scenario, if you spend ~$146 million and win ~$800 million, you'll be taxed on the ~$654 million profit. Off the top of my head you're looking at ~$400 million in after tax winnings.
So the investors get their ~$146 million back and then take a share of the remaining ~$400 million.
So, yeah, probably not a winning strategy.
https://www.irs.gov/taxtopics/tc419.html https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Can...
I think there is a limit on # tickets purchased.
When there are cracks in the lottery games there are people who do find ways to exploit them.
http://www.nytimes.com/1992/02/25/us/group-invests-5-million...
Splitting the pot and paying taxes on the lump sum or taxes + time on the annuity means that you likely take a net loss buying all the possible numbers.
I think that's mainly why I get a few tickets sometimes when it gets super high, even though I know my chances of winning are significantly worse and my chances of winning at all are almost nothing.
Makes me wonder if getting more people to play higher jackpots ends up evening things out in the end.
I'm bad at maths.
"Here is $50k. Now quit your job and start a start-up"
Difficulty bonus -- startup idea is generated by a Markov chain and could be anything -- "Uber for dogs", "Taxidermied pets as drones" etc.
2. You get a paycheck, even if it's less than market rate.
3. It's fun and exciting to use someone else's money to try to come up with a new business type.
Most startups are not able to raise money from outside investors. In fact I'd say outside of the Stanford student/graduate/dropout crowd, it's probably less than 1%. The other 99% also don't get paychecks because they can't draw from investment capital they never got.
Your odds of succeeding at a startup may not be better. With powerball, you are risking $2 for 292 million to 1 odd. With startup, you are risking several thousand multiples of $2 in opportunity costs for potential return that might be at best 10x.
As a founder you don't get a paycheck unless you raise decent amount of OPM. There are 100s of founders who fail to raise any funding for every one who raises some. You just don't hear about such founders. Same applies to your point 3. You should talk to people who have raised OPM and the handcuffs they operate with.
Obligatory (previously posted here): http://www.aviato.com/quiz
Customers (drawn from the rational HN crowd) pick lottery numbers and pledge not to play the lottery for a period of time (selectable from a really cool animated dropdown). At the end of the period we mail them the amount saved on tickets or, in the unlikely event the numbers actually came up, lost by not playing.
As premium paid service, infinite period of time with physical printed yearly reports and cool framed diplomas to hang on the wall.
Spent $62,630 Won $5,793 Win/loss $56,837
Hovering consistently just below losing 90 cents on each dollar.
And boom, I won $1,000,000. So I guess I should start playing the lottery?
(I suspect there's a bug).
91% of invested money lost
(to be clear I'm not implying that you said that total will guarantee a jackpot win)
He knows full well it is very unlikely he'll ever win, but he enjoys the excitement/fantasizing that it provides him throughout the week.
ROI: ~10%
http://www.investopedia.com/terms/r/returnoninvestment.asp says its the first one.
ROI: ~1,000,000%