Mega Millions ticket wins $1.34B lottery jackpot
axios.com
axios.com
Those are really crappy odds.
That is probably better than the approach of some states which make obtaining licenses to sell alcohol or marijuana expensive. In most cases they are capriciously controlled by politicians and bureaucrats, involving prohibitive fees and outright bribery. At least PA's approach is more equal in effect.
The same cannot be said for any of the things you mention.
Its not a "tax" - it's just fun. The odds are terrible, but the dream / "what if?" aspect of it is fun. Theres no downside to playing (Who doesn't have a dollar or two? even when I was broke and lived in my car, I had a spare buck here and there), but the potential upside is limitless.
I’m not saying I agree with the “it’s a tax” position, but I definitely don’t agree with the “it’s just fun” position. It’s an industry that preys on poor people’s poor (monetary) decision making skills.
Because that actually has zero upside potential and does not fund local nonprofit activities (like lottery often does, depending on your location).
Netflix and the lottery sell different things at a similar price point. I’ve subscribed to both at various times.
Edit: it seems the comment I replied to was changed. It used to say approximately “Netflix doesn’t sell a dream to get rich”
I wonder how much lottery is like other (gambling and non-gambling) industries where so much of the revenue is from "whales."
Be careful which habits you form.
>[...] but I definitely don’t agree with the “it’s just fun” position
How do you feel about people going to vegas to gamble? Does that also not count as "it's just fun" because they're losing a significant sum of money?
As with anything, you can look at decisions on an individual level or a systemic level, but the system itself (like the hollowing out of the middle class) encourages certain types of behavior.
Some people drink more than a 'casual' amount. These people also end up paying more in taxes because of it. Does that make you want to take that away too?
So looking purely at the macro level, the net effect looks a lot like a regressive tax. Which is why people say that even if it’s not 100% true.
Yes it is a tax on a voluntary transaction but those are taxed already. I think the problem is less that people play the lottery than that the lottery is taxed so heavily to begin with.
Anyway I’m not agreeing or disagreeing with the term. I am just explaining to you why people refer to it as a regressive tax.
Terrible is an understatement. With those odds, you would have better success to throw $10K on DOGE than to buy $10K worth of lottery tickets.
The main difference being you can hold your DOGE coins vs wasting all your money on tickets valid for a week and to find out that all of them don't match the jackpot numbers.
You seem to be arguing that it's a fun fantasy, so what's the harm in playing? That misses the point completely. My comment is not that the lottery is bad or should not be played but that it is a regressive tax. We could eliminate or greatly reduce the tax and double the number of winners.
I don't think the government should be funded by taking money from the poor. What's the tax on golf resorts or yacht rentals or things that rich people do for fun? Is it 45% of revenue?
Maybe it's a very HN/reddit take to be suspicious of regressive taxes, but I think it's basically status quo bias to reason that the 45% revenue tax on poor people's recreation is fine because that's the way it is - or whatever reason you think this is fine.
Sure, the poor are more likely to play but I think your argument is on more solid ground if you flip it and suggest the lotteries shouldn't be taxed. At least not like they are. The problem after all is not that people play lotteries but that so much of it is taken in taxes.
-- Sir William Petty, 1662
https://quoteinvestigator.com/2017/10/21/lottery/
Sir William was apparently a very early Reddit adopter.
(Numerous other versions and observations at the QI link, for those with substantive interests in the history of the observation.)
If you are a regular non-connected, non-Ivy League folk, your odds of becoming a billionaire via day zero equity appreciation are roughly the same as becoming one via playing the lottery.
And yet this website is full of people deluding themselves that they can become one, and also cheering on other people posting their billion dollar delusions. It's always a real pain to watch the contempt that people who are doing well for themselves have for people who live in inner cities, while engaging in the same behavior, only from a relatively higher vantage point.
It's not even necessary to go all the way up to 1 billion, 100m net worth odds for a regular non-connected, non-Ivy League folk are also kinda the same playing lottery vs. day zero equity appreciation.
The crossover is somewhere below 100 million dollars, maybe even less than 10 million dollars or there about
They are pouring gas on their delusions, big difference compared to the reaction to people who play the lottery.
This is incredibly out of touch.
The GP comment was talking about the kind of people who don't even own stocks and probably can't afford to buy even a single share, because it would eat into their budget much more than a $2-5 lottery ticket.
Also, lottery ticket EV isn't -100%, it's anywhere between -50% and -80%.
The stock portfolio growth numbers are also wrong for long-term, but we'll let that one slide.
People who buy a $5 lottery ticket every day could absolutely afford to buy stocks if they'd stop doing that.
> Also, lottery ticket EV isn't -100%, it's anywhere between -50% and -80%.
Even assuming your optimistic number, it's idiotic to "invest" anything into something with an expected return of -50%.
In any case, $5 lottery ticket x 2 draws/week x 52 weeks/year = $520. You can buy some stock with that. And plenty of people (unfortunately, mostly poor people) spend a lot more than $5 per draw.
Put another way: If you’re poor, unconnected, and uneducated, your odds of becoming a billionaire are zero.
If you’re poor, unconnected, uneducated, and play the lottery, your odds are ever so slightly higher.
Maybe your best shot at becoming a billionaire is indeed winning some jackpot. But if you’re looking for anywhere from moderate wealth to millions, you’re much better off trying to find a job and start a business.
So I buy my tickets as long as possible before the draw, get to fantasise about what if and have a couple of weeks of happy, crazy dreams.
To me that is worth the 10 or so bucks, no matter the odds being so badly stack against me, I guess that is so for many people (who are not addicted to gambling).
If you bought tickets to every draw the expected value of a ticket is $1.10/$2, but if you only bought for this draw the expected value was much better. The expected value before the draw was not 3:1, only slightly above unity because the biggest likelihood was no winner, and a significant likelihood of a shared jackpot.
The odds were the same, but the EV was certainly higher than most draws. Still, the EV was likely negative. $2 ticket x 303 million-to-1 odds would require a post-tax cash-in-hand value exceeding $600 million, which the winner is unlikely to see after tax, despite avoiding a split with a second winner.
A winning lottery ticket is an optional life-changing object. A few seconds with a lit match, and life goes on unchanged.
(incidentally, before taxes, I guess that winning lottery ticket is worth ~12,000,000x its weight in gold)
4, 8, 15, 16, 23, 42
No, I'm talking about technology-wise, would I (in the interest of protecting my newfound $):
-- Before claiming prize, immediately disconnect/uncouple all financial apps and services from my publicly discoverable phone number (to prevent financial hijacking of accounts)
-- Disconnect my phone number from my iCloud / iMessage and link instead with my private email address (to isolate randos contacting me by phone number)
-- Take the approach to get 3-4 clean iPhones,
Phone #1) for iMessaging / Whatsapping with friends, family who have my email,
Phone #2) a new phone number for only answering telephone calls from same,
Phone #3) for all financial matters/apps, and phone is used only for that
Phone #4) my old phone number in case I still need to receive something, but which will get flooded with spam.
-- Remove any public videos of myself, or even wipe my voicemail recording, so that my voice is not known to anyone and could be used maliciously?
-- Would I swear off any further commenting (or even delete my accounts) on Reddit, HN, other sites for fear that it could link back to me and open me to some hacking vulnerability? The phone strategy above is with the notion that someone sends you a poisoned text message and it scrapes/hijacks your financial accounts, etc.
All of this of course focused on the likelihood that once your name becomes public, hundreds of malicious actors will be trying to find some way into your accounts. Or is it that when you reach this tier of having money, your banking is just not done the same way any more?
And then all the usual of moving to a temporary private / unknown address, talking to lawyers/finance, going on vacation for a year, etc.
> Government realizes 1.6B accrual from gamblers ignorant of odds.
Seems $1.34B is a marketing number and the actual number is $708.5M pre-tax (58% of marketing figure). They also encourage you take money every year for 30 years instead, probably paying out a bit extra and banking on your incapacity to calculate for inflation.
Knowing that most people winning lottery ends up as a bankrupts I would encourage that as well. Maybe I would even took that deal, even if I earn more than most people having that much money is very risky
$43M / year for 30 years sounds like a pretty good retirement in any sort of inflation short of catastrophic economic collapse.
You're not entirely wrong - your total expected payout is better if you take the lump sum and invest wisely. However if you don't trust yourself to have good discipline and strategy and annuity version isn't entirely crazy. Your EV is lower but you can't completely screw yourself.
The "bit extra" it what takes you from $780m to $1.34b, isn't it?
(Edit: Can't reply: the understanding comes from a lifetime of experience with weasels. They use the figure to describe the round, the winner is not entitled to the round total. This is an intentional marketing doublespeak on their part.)
The very first sentence reads "A ticket sold in Illinois is the sole winner of the $1.34 billion Mega Millions jackpot"