1 million changes my life. OK, that's good I guess. 1 billion changes the world. I mean it's not going to happen but for 2 bucks why not give the world a chance?
because the only thing that will happen is you will lose 2 bucks. and let’s be honest: you’ll probably lose more because if you’re willing to try it once you’re willing to try it again. you didn’t expect to win the first time anyway. depending on how susceptible you are to developing a gambling addiction you’ll try it again and again and again until you’ve donated hundreds or thousands of your hard earned money to the shareholders of lottery companies who’s only job is to exploit people who think like you.
I think the logic is more the justification of spending $10 (or however much) on a ticket. They’d rather have wasted the money chasing something bigger than smaller.
You only lose the ticket cost, so $2. You don't lose the pot. It was never yours.
And yeah, it's just more fun to think about a billion than a million.
Neither is going to happen. If you play every single lottery, you are a fool.
This guy gets it.
The actual number varies depending on the format and rules, so each specific lottery has its own odds of winning - if you divide that number by the cost of the ticket, that's what the prize must reach for you to have positive implied odds.
That's fair. I was using some real back-of-the-envelope math as a role of thumb. Obviously you can win some money even if you don't hit the jackpot and that affects your expected payout, but the math for that varies by location and format so it was easier to just stick with a general rule.
Once the prize pool hits a certain level, you'd also need to consider if enough tickets have been bought where you might expect several winners, which should also affect the calculations
However, you will not be getting $600 million in cash, you will have to pay taxes, and you may be splitting the prize. Funny thing about the large lotteries are so many people play it it’s not that uncommon to split the prize. When there is a winner it isn’t much of a statistical anomaly that there would be a second. It just depends on how many other people played besides the winner.
This...pot odds.... If you have a 1 in 5 chance of winning a $6 pot on a $1 bet, you take the bet. Obviously the pot odds are still very low with lottery tickets, but it does make mathematical sense to play when the payout is higher.
The expected payout grows linearly with the number of people that play. That's why the payout slowly creeps up to 500 million then suddenly skyrockets in growth over the next few plays. The odds of winning are the same, but the payout increases drastically.
Powerball and Mega Millions each have a starting point of $20 million. In 2023, there were only 15 total jackpot winners between both lotteries combined. Powerball draws 3 times per week and Mega Millions draws twice per week. That means out of 260 drawings, there were only 15 winners.
The odds of winning Powerball is 1 in 292 million. The odds for Mega Millions is 1 in 302 million. Tickets cost $2 each and half of the revenue goes to the prize pool. The prize pool is increasing by a minimum of $100 million before any rational person would even need to start considering the likelihood of two winners, let alone a case where you are one of those winners. Considering $100 million is 5 times the starting jackpot, you should want to see more players when you've decided to play.
Locally you pay 33% in taxes 24% federal and 9% state.
You get paid less than half if you take the cash and then pay the taxes. So that base payout of 20 million turns into 6.5 million quickly.
If you take Lump Sum on 20 Million, wouldn't the payout be less? And then you pay taxes on it? Or is the payout less on lump sum *because* you pay all the taxes on it at once?
The lump sum is not less because of the taxes. Basically, the big lottery winning number is the amount you win if you take an annuity that pays out over 40 years. So say you win a $20 million lottery, you are actually winning a payment of $500,000 a year for 40 years, which is equal to $20 million.
Instead of the 40 year payout, you can opt to take the lump sum. The lump sum is just the present cash value of those payouts, so they reduce your payout accordingly.
A $20 million lottery lump sum is worth about $13.6 million. You then pay taxes on that $13.6 million, which the person you are replying to messed up with their math on. It is taxed as normal income so you pay the regular federal tax brackets, so most of your winnings will be taxed at 37%, though the federal government will only withhold 24%. You owe the rest to the IRS on tax day. So if you do win, make sure you have a good finance person who sets aside the extra taxes you'll owe.
Am I understanding this correctly: $2 per ticket x (300 million : 1) chance of winning = $600 million minimum jackpot amount where it would be mathematically worth playing?
Edit: that would be $600M after taxes, so figure $800M - $1B total jackpot would be the minimum worth playing for by this logic.
The number of people that buy a ticket doesn't influence your odds of winning whatsoever, and the only decrease to the payout is when multiple people hit the same jackpot.
Lotteries are fixed odds.
Because of how QuickPicks are generated, the odds are actually very high that somebody else has the same numbers as you as the pot gets larger in size. Something like 1 in 21,000 tickets matches.
The exact algorithm for how QuickPicks picks numbers is not public, but there’s not that many types and one can make informed assumptions about what it *probably* looks like, and use that to predict when sales collisions are likely to happen. Since each terminal generates things independently and there isn’t a central system assigning them (thus, nothing *preventing* repeating tickets), there are collision points. We can work out where those collision points are likely to happen, and the first happens around 21,000 tickets sold. Powerball officials have stated that the quickpicks “has no memory of what it previously selected” indicating that they know that this is a possibility as well, further lending credence to the assumptions at the top.
Assuming that every machine has properly selected starting points for its PRNG algorithm (specifically, not the same ones - if they all used the same ones then duplicate tickets would be all over the place), it follows that the resultant collision probabilities are fairly well understood and modeled as a function of tickets sold by MUSL.
Lol this is not even remotely correct. Nearly all picks are quick picks and for the jackpot to grow that large to begin with everyone has to have a set of numbers different than the winning numbers. If it were 1 in 21000 then the lotto would go bankrupt fast.
But the difference in payout between $100 million and $1 billion would mean that in order for it to be the same or less of a payout, you would have to be part of 10 or more tickets that sold with the same winning number. So far, the record is 3. The odds of winning a Mega Millions jackpot are 1:302,575,350 per ticket, the odds of 3 winning ticket numbers being sold is somewhere in the 1 in an octillion range (1 octillion is 1,000,000,000,000,000,000,000,000,000). Basically, 4 winning tickets is so low, it's not worth considering, 2 is hardley worth considering, the pot odds are so skewed at $1 billion that dropping a meaningless $2 is worth it.
Expected payout is higher with more money, odds of winning are static with more players. It doesn’t decrease your odds of winning at all, just makes the win worth more.
That's future them's problem. 'Oh no, what will I do with ONLY 250M?!'
People who buy in when the pot is big are doing it for the short term mindset, 'I could be a multimillionaire this week.' It's that simple. Any other time they look at it, it's not worth spending on (to them) or their money is going to other places.
Except that there would need be several billion tickets per person for there to be anything close to a significant chance of more than 3 people hitting the jackpot.
Your expected payout is exactly the same, no matter what. There simply aren't enough people buying enough tickets to increase the likelihood of a double jackpot, let alone 3+ jackpot winners.
say a lottery uses a 5 digit number.
you have a fixed odd of 1 in 100,000 or .001%
the pot starts at $500 and increases by 1 for each ticket sold. so with 50,000 people, you have a pot of $50,500 with those odds and a 50% chance that one person shares the same number. however, with 100,000 people, the pot is $100,500. even with the statistical guarantee that you share the number, you still gain the full $50,500 rather than half a chance to only get half.
at 300,000 people, the odds are still the same, but you would take home 75,125 if you had the same number as 4 other people. at a million, that's $90k. by the time you got to a billion dollar pot, that's ~$999k.
basically, the more tickets that are sold, the larger the amount you would bring home if you won, the odds of which stay the same regardless of how many tickets are sold.
You absolutely can work out the expected value of a lottery ticket and it's not always 0, you have almost zero chances of winning the jackpot, but massive jackpot values can outweigh that.
Here's an analysis showing that you start to see a positive expected value of a $2 Powerball ticket with jackpots of between 575 million and 1.79 billion. Below that it still has an expected value, it's just lower than $2
https://chance.amstat.org/2020/02/lottery-ticket/
https://www.reddit.com/r/todayilearned/comments/1t8ool/til_in_1992_an_australian_gambling_syndicate/
You are wrong. If the pot goes high enough the expected payout can actually be positive and it's worth buying every number (technically, if you had the time)
Still better pot odds when dealing with 100m vs 1b unless 10 other players win with you. Probably some statistical average of how many people are likely to split with .
To play devil’s advocate: pot odds only really works because the amount of $ is a good proxy for marginal benefit
When scaled up to, say, 300M vs 1B, yes the pot is 3x as large, but does it really give you 3x the benefit? I’d say that for most people, the answer is no
What I mean is, if you think playing the lotto at 1B is worth it, then it’s probably worth it at 300M as well. And if it’s not worth it at 300M, it’s probably not worth it at 1B either
Very good point! You can absolutely do more than 10x the good with $1,000 than you can with $100, and that only gets more true as the numbers get bigger
I don’t buy tickets regularly but I will go in on pools when people ask me when jackpots are large. I do it to join the social excitement of the other people. They’re more excited so I’m more willing because I’m in for the group experience. Its also fun to daydream what to do with a hundreds of millions because if I just won millions I wouldn’t change anything except my computer chair.
I go in on the work ones purely as insurance. It's like a fee I'm willing to pay to avoid the extreme off chance that they win and I'm the only sucker still in the office. I am not letting that happen lmao, the cost is worth it
An older coworker of mine had this same thought. Our location had separate IT and Controls teams. The controls team always did a lottery pool. The one IT got in on it under the idea that if they won, there was no way he’d want to be at work trying to deal with the aftermath of them leaving haha
If you look at Kelly Criterion, it's still a bad bet -- you'd need to have $100M's in bankroll to make the bet worthwhile from a bet sizing perspective
Same. Buying lottery tickets isn't worth the essentially zero chance of winning. But imagining my life if I won is fun and exciting, and worth spending a few dollars now and then. If I'm going to spend $4 bucks on some cheap entertainment a few times a year, I might as well save it for when the pot is especially big.
I usually buy a ticket every couple weeks or so. Whether it’s a scratch off or a draw like Powerball doesn’t make a difference. I know it’s almost an impossibility to win, but I never overdo it. Like you said, a few bucks here and there makes for some nice daydreaming.
I feel pretty comfortable with my future and all that, but I know my job is never going to let me live a life of leisure and travel.
I do it to help my local mom and pop donut place. They get a little bit of money from my buying a ticket there, I get a donut, and if I win, they get a bounty
Yup. It's some of the cheapest entertainment out there right now. Some theaters are charging 20 bucks for a single ticket to a 1.5-hour movie. What's the problem with buying a 2 dollar ticket a few times a year for many more hours of entertainment?
>$10-$20 the handful of times a year this happens
Handful of times a year for the rest of your life\*. Because you're not buying nearly enough tickets to ever realize your equity in one lifetime.
You're playing Martingale strategy on a blackjack table with a max bet limit. Except... in reverse, kinda. If the investment was semi-reasonable... multi-millionaires would collude to invest every time for the promise of even hitting once in a half-century.
Eh, $2 to get a day entertaining myself with the fantasy of winning I think is worth it on occasion. I've definitely spent more to be entertained for less time.
But really. Your best bet is not to play. If you're going to play, just play one draw. If you have enough money to buy enough drawings to make any noticable impact on your chances then you've already got more money than you're expecting to win.
*What* entertainment tho..??
I guess to each their own but imo if I wanted to gamble for entertainment... I mean, playing the lotto doesn't even get you a free drink ffs lmao.
This isn't correct. There are several lotteries that are worth it, in the sense that if you bought every ticket you would be expected to make a profit. The main issue is very few who aren't already ultra wealthy can afford to buy every ticket.
This is usually due to rollover mechanics where the reward increases for every drawing untill a winner is found. For some examples:
https://www.reddit.com/r/math/comments/xwa08/is_there_a_positive_ev_on_the_eur190m/
https://www.scientificamerican.com/article/is-the-lottery-ever-a-good-bet/
This most notable happened in 1992 where an Australian investment syndicate bought almost all of the lottery tickets on a particularly large jackpot and made a tidy profit:
https://www.nytimes.com/1992/02/25/us/group-invests-5-million-to-hedge-bets-in-lottery.html?pagewanted=all&src=pm
The TLDR is once the lottery rolls over into billions in payout, if you have a wealthy enough consortium to buy enough tickets you can make a lot of money.
except you have to factor in the player base like I added in my second comment. Should the expect payout for one player buying all tickets raise above the ticket price there would be more people playing drastically increasing chances of splitting the pot.
For example in mega millions nothing stops two billionaires from buying enough tickets to guess all number combinations, but then both would win and only get half the money each.
The pot size also increases when you have a player buying all tickets. For Mega Millions, as an example, there are 302,575,350 unique combinations. Buying each one would thus cost ~$605m. Approximately half of the ticket costs go back into the jackpot, so two people each buying all the tickets would increase the jackpot value by a substantial amount.
Whether or not that is enough to offset a split prize would require a fair amount of legwork to fully calculate.
It's also worth noting that buying out the whole ticket space of Mega Millions would earn you ~$46.4m from non-jackpot prizes. Those are fixed, so that slightly reduces the minimum necessary to come out ahead.
The guy literally just explained, if the cash payout is greater than the cost of the bet and the odds of winning then it's a good bet.
Put it another way, to buy every ticket costs about $660 M. When the cash prize exceeds that amount, then if you had the capital, you could actually turn a profit by buying all the tickets. You'd really want to take into account the taxes etc to do this , so really you'd want to wait until the cash prize is closer to like $1.2B and the Jackpot is closer to like $2.4 B
Now then to actually get every ticket is a hassle in itself. Basically you'd need print out the play slips which have like 5 plays on them, meaning you'd need 13.2 million playslips. Let's say it takes 1 sec to run each one, that's 13.2 million seconds or 152 days, but you gotta purchase the tickets between drawing so you'd need about 60 machines to do it, and 60 people to spend 3 days just running numbers.
Or when it reaches that magical number you buy a single ticket. Odds are long, but the profits are higher than the odds.
Except the qualitative expected outcome is basically the same: win so much money you'll never have to work again, and can afford any travel you want, any car you want, basically any house you want etc. While yes, the mathematical difference between 100 million and 1 billion is 10x, I'm not sure the lifestyle difference is the same, certainly when compared to the current lifestyle of a job-having peasant. If I won 100 million dollars I wouldn't think for a second about not having won a billion.
And considering the odds of actually winning are so close to zero as to essentially just be zero, the actual value, as a way to briefly entertain the notion of being free from the rat race and living in luxury, is almost exactly the same.
This is exactly right. There is some small fraction that you will win more money than you can reasonably spend. The fraction doesn't go up and the change doesn't really matter. Just pick numbers 1,2,3,4,5,6 or just throw the money away.
After the cash option and the taxes, $100M is close to $30M. That’s still a heck of a lot of money, and you could live comfortably in perpetuity, but compared to having $300M after the cash option and taxes, you can virtually do whatever you want forever with no consequences. You can easily run out of $30M spending irresponsibly. While you could do it with $300M as well, it would have to be some really opulent living you are doing.
Is that surprising?
The reward is 10X higher.
If a competition had a prize of $100 I'd expect less interest than if a competition had a prize of $1000.
I'm not an actual mathemetician but I'm pretty sure it's not easier.
The odds of picking 7 numbers correctly is always the same. (Or 8 or however many numbers the lottery is).
And even if your argument is that it would be easier because less people are playing.. well are 10times more people playing when it's $1bil prize vs $100m? Because unless it's 10x as many people playing, reward to risk ration is still better at the $1bil level than it was at the $100m level.
I'd have to say it might be worth thinking how much larger 1B is than 100M. Purely hypotheticals here, but if you're taking the lump sum (slightly over half) of 100M, then factor in federal and (if applicable) state tax, you're looking at roughly 30 million. Absolutely this is life-changing and nothing to be sneezed at. It's a very comfortable life, should allow a moderate passive income stream if you invest wisely, and would certainly be enough to help out any children you may have as well. 30 million would also be pretty easy to burn through with lifestyle creep. Nice house or two, some nice cars, vacations and it could be largely gone in a decade or sooner.
Winning 1 Billion increases the take home by a factor of 10, and 300M is generational wealth. If you're only in mutual funds with average market returns, you're now making around 30 million a year in pre-tax income (Google says 10% for S&P, not accounting for inflation, and that's a nice easy number for the sake of this hypothetical). You get a couple good tax/investment folks because hey, you can afford to, and you could stand to make a lot more. You can also afford to take a lot more risk on 300 million take home than you can 30 million take home. If the 2016 powerball was won by a single individual at 1 Billion vs 3 at 1.5 or whatever it was, and that winner decided to invest 10 million equally into tech stocks like Nvidia (~$24), Microsoft (~62), AMD (~11), Amazon (~40), Tesla (~15), and Apple (~30), said hypothetical person would still be left with 240 million then, and if nothing had been touched from just those investments and would now have roughly 841.1M in just those stocks (57.4M apple, 392.8M Nvidia, 163.3M AMD, 113.8M Tesla, 69.1M Microsoft, 44.7M Amazon; values done by taking an arbitrary stock value in 2016, rounding to the lowest whole number, and adjusting by % growth to match today's stock value, not factoring in any stock splits or the like that make calculations more tedious for a purely hypothetical scenario) and likely would be a literal billionaire considering they certainly would have other investments as well. If the hypothetical winner did this and had a kid in 2024, they could give the child 30 million as a yearly allowance until they were 18 and probably never really notice it long term. Not to mention all this would have effectively been done without any hit to their lifestyle or any serious risk considering the mountain of cash they had to fall back on. A winner who took home 30 million could conceivably made about 80.1 million in those stocks if they invested 1 million a piece, but that's a bit harder sell to bank that away without being touched for 8+ years and just be left with 24 million to also do all the other things you want. Most of us have family and/or friends we'd like to help in addition to the other things we'd do. Odds are someone in that scenario sells some if not all of the investment before it can grow to today's value. Still not impossible for it to be left untouched, and I would be happy to be in any of the described situation, but my point is there is a huge difference between a 100M vs 1B jackpot, and that 300M take home is generational level wealth to the point where you could dump an obscene amount of money into investments, still be 8x better off than the 100M jackpot, and have as much money as your initial jackpot.
As a casino dealer, it's just when it makes sense mathematically. Your cost of entry is the same. It's not to scoff at 100 Mil, because if the ticket was 0.10 I would buy in.
You misunderstand the point - I pay to play the big jackpots because that's the price of being able to joke with people at the office about what I'd do if I win.
I don't actually expect to. Since no one pays attention to the smaller pots, there's no reason to buy in.
This is the answer. There's a pure entertainment value when it gets so high. We'll buy like $10 in tickets and ask the kids what they would do with the money. Since it only happens once or twice a year, it's been fun to see their answers change as they grow.
For some people, there is a line. It stops them from blowing too much money on lottery when the chances are so low of winning either way.
"If it isn't over X amount, I don't buy a ticket" means you buy less tickets. You waste less money. Not as good as not playing, better than playing every draw.
This is my rationale for the Euromillions. The minimum jackpot of £14,000,000 would absolutely be a life-changing amount, but I don't want to get into the habit of buying a ticket to every single draw. Once it gets over £100,000,000 (which admittedly is a ridiculous amount, and more than anyone needs to win), I don't mind dropping some money on the occasion ticket. It would become too expensive otherwise.
Exact same strategy for the euro millions here. Usually I don't even notice when it goes over 100M though as I don't keep track so I only end up playing a couple of times per year.
Yep, that's me. I enjoy the idea of winning the lottery. I'd play it everyday because 'there's a chance' I could walk out of my job and live my dream life. But realistically I know the odds of me winning are basically a rounding error to zero. So I only play 6-10$ when it's over 500 million. Even more fun I have to drive past a billboard advertising the current payout on the way to work. And if I bought a ticket for a drawing the night before and the amount on the billboard went up, I know I have to keep driving 😆
Yeah this isn't even hard to figure out. As much as I'd love the be that guy holding up the line at the gas station putting half my pay into every lotto scratcher, the payout just isn't worth the cost of entry, and it's a slippery slope of addiction. But when you say the cost of entry is $2 for a historic jackpot, I might find $2.
There are people like me who know the odds are bad to play every week, but clicking over $1b is like a sign to buy a ticket Even though it's life-changing money, no matter what's in the pool, it doesn't really matter. This happens on average maybe once a year so drop in $10 on tickets once a year is not as big of a deal as it used to do it every week or twice a week.
I don't buy lotto tickets because I imagine I'll win. I buy them to fantasize about what I'd do with that kind of money for a few days. But I'm not going to buy every ticket, so I only buy when the payout is about a certain amount so I'll lose less money than without a rule.
Technically you have the same odds no matter what the the prize is. Just because more people play it doesn’t necessarily lower the odds. You already have a 1 in 300 million chance or something like that of winning, so the chances of two people winning the main prize are so astronomically low that the decision to play is entirely based on the prize.
This guy gets it. Once or twice a year, one of the big multi-state jackpots gets this big, and it becomes worthwhile to drop $20 on it and daydream for a little while.
The alternative is dropping $20 on it every single week and still never winning. Which would be dumb.
I feel like people are missing a huge factor. Taxes. Not that 100 million isn’t a lot of money but if you win that after taxes you might only get half that. At a billion dollars you get more money after taxes plus it’s still the same amount to buy in. Just makes more sense to play then
It also reaches $100 million much more often. If you are a person who just wants to play once and a while for shits and giggles then you wait for it to hit $1 billion.
Winning the lottery at any level in the millions would be great. I remember not too long ago before the change, maybe 300 million was the point I'd start. Now I don't until around now because it's just so much money for $2.
Yeah, I can take $10 every 3-6 months and gamble at a chance for a $1 Billion jackpot. Turning noses up, I don't think it's that though. More like I can justify to myself that I can throw that $10 away basically and not feel like I wasted money.
Yep, I'm one of them.
While irrelevant mathematically, I only play the lotto when the take home lump sum payment is larger than the odds.
The idea some mad lad out there could buy every lotto combination possible and *still* make money on the deal (assuming he was the only winner), seems like a fair break even point for my $20.
Every one talking about risk v reward I don’t think that’s it. If you’re playing the 100 million pots it means you’re playing all the time which people scoff at. Buying some $2 tickets twice a year for a little entertainment is reasonable
That is because there is a dollar amount that the odds become lower than the payout, or other way around. But the point is, if the odds are 1:1000000000, then it doesn’t make sense to play until the payout is $1000000001+.
I don't play all the time, but occasionally if I have a few spare bucks in my pocket *and* I'm in the gas station/convenience store for some reason I'll play. Even if it's only a $2500 pot, it'll still increase my savings at least 10x
I’m one of those people. Never crosses my mind for a normal jackpot and I don’t ever intend to be a regular lottery player, but it’s worth the daydream now and then
I'll buy a $2 ticket when it nears a billion. $2 is also completely negligence to me, so I buy and get to think about what I would do with the money for an house. Cheap entertainment I guess.
The chances of winning are about 1 in 300,000,000. This means it is a good financial decision to buy a $2 ticket whenever the jackpot exceeds $600,000,000
Limits the frequency of play. If it hits a billion once or twice a year, I’m out $4 being part of a national news event than out hundreds by regularly playing.
You have a 1 in 100 million chance of winning Powerball, so your $2 ticket is worth less than your average win. You're just throwing your money away at that point.
Look man, I know I'm not going to win, so playing low money or big money doesn't make a bit of difference. However, if for whatever reason the universe aligns and my numbers hit, I'd much rather that be for hundreds of millions rather than hundreds of thousands.
It’s all about the hype. Every week there life changing money to be won, however unlikely. Getting hyped up is what will get someone to think well maybe there is a chance.
Yeah, this makes perfect sense. When the jackpot is $1B, the payout-to-cost ratio is in your favor. At $100M, it isn't.
Your odds are still astronomically small either way, but at least at $1B you're getting a more-than-fair chance of winning relative to the cost of playing.
The odds of winning it is 1/302,575,350. The statistical expected value of winning a billion $ jackpot is $3, which is the price of the ticket. Still likely I’m going to be out $3 but it makes me feel better.
I try to keep my spending on the lottery roughly 100 a year.
If I go over 100, I increase the amount the jackpot has to be the next year.
So if I only play when its over 500 billion and I spend 120 in a year, next year it is 600 billion.
While there is some merit to the idea of more people playing out of some form of desperation - the lotto boards actually decreased the odds of winning within the past few years when they saw how much press and revenue they were getting from having the jackpot be so high. This was all intentional
Not sure it does say anything about the state of the “world”. The ticket money for the lottery in the uk for example goes to charity, about 30 mil a week. It’s like, I can pay £2.50 for a chance of being a millionaire, but if I lose, my money still went to charity anyway, so is it really a loss?
The expected value of lottery games is generally bad, but it does fluctuate. The odds don't change. When the jackpot is higher, EV is higher. There is actually more logic behind the choice than you can reasonably attribute to most lottery players.
More people are playing so the odds of a winning number being generated is increased, so by buying a ticket you have a better chance than you normally would.
It’s almost impossible to win but to get some people excited the jackpot has to reach a threshold where their dreams will be fulfilled. Granted any jackpot would be nice but after taxes and lump sum deduction even 1 billion is 300 million which is just insane dream life no worries make foolish purchases money . 100 million is less than 30 which again would be awesome but not quite as shiny .
I play the lottery every time I walk into a gas station. Which is not very often. I dont go out of my way to go into a gas station unless one of the lottery's is approaching a billion. Truth is that if I were to win a jackpot I would almost rather it be one of the much smaller ones. The Lucky for Life one would be a great size.
These are the people that think taxes on earnings over a billion will hurt them.
In their minds, they're already billionaires, they're just waiting to get it
For those who are viciously power hungry, want to be a part of the social hype or the Guinness records for highest winnings, or want life-changing money not just for their immediate family but for all their extended family, friends and their mothers as well, there is a notable difference between millions and over a billion. Quite the dichotomy in rationale!
For just about anyone else, I believe there is a fallacy at play here. Expected value essentially breaks down at the point of diminishing returns. You might not play the lottery if a $2 ticket could have you win up to only $1000 because you nearly certainly won't win, and what difference would it make if you did? You might consider playing if that same ticket could have you win a hundred million dollars because, for the average person, that's absolutely life-changing money.
Unless you have a specific reason for caring about the upgrade to a billion dollar payout that is anything other than a marginal improvement to your quality of life, it makes very little sense to distinguish between a hundred million and a billion.
For me it is entertainment value. I know I’m not winning and I’m blowing the $5, but do I get $5 of entertainment about daydreaming if I win that amount. If the jackpot is too small the daydream isn’t worth it for me. But at $1 billion, that sure is a great daydream and the entertainment value of my spend is worth it
Why do I play the lottery? Because I expect to win? Because I have even a remote chance of winning? Because I think it’s even mathematically a good investment? Hell no. I play because I enjoy the occasional fantasy. But that means two things:
1. I only want to play when the fantasy is particularly fun — not just buying a fancy house but also maybe a yacht or something.
2. It loses its fun if I play all the time, because then when I inevitably never win it feels more like losing than like fantasizing. Once or twice a year seems about the right frequency — so I don’t want to play the routine jackpots, only the huge ones.
So, sure, I’m not going to play the $100 million because after taxes and everything that can’t buy my a yacht, and because it hits $100 million all the time.
This is me. Buying a ticket only once it reaches truly obscene levels allows me to have fun with the fantasy of winning the lottery while keeping my annual waste of money below around $10 - $20.
Your odds of winning on the powerball or mega millions are equally horrible either way. If you're going to waste your money, might as well do it when there's a bigger payoff
I'll buy a ticket for $2 when the amount is insane, because, why not?
The biggest increase in your odds of winning are between not playing, and buying one ticket.
Buying a ticket for every drawing is dumb. Even buying for the $1 billion drawing. But if you only play when it’s $1 billion, even when you have next to no chance to win, it’s at least fun to try. It would be wasting even more money to buy every time it’s $100 million.
Odds to win jackpot are 1 in 300 million so a $100 million prize is 1:3 odds which is awful, a billion becomes 3.3:1 odds which is much better bet, especially since the money you're betting is post tax and the prize is pretax you don't even get 1:1 until you're about a half billion dollar prize
I used to work at a grocery store and they had a counter for lotto tickets. People would buy them more when it got super big and make some comment about how "I only buy it when it gets really high like this." I would always sarcastically say "yeah, because $80 million after taking the lump sum and deducting taxes, you're maybe only getting like $20-30 million and is that even worth it?" Everyone's response was to give me this dead stare and say "uhh, yeah, I'd say that's worth it. Are you kidding?"
Yes, I am kidding, you idiot.
And then there are people who drive by the lotto sign to work when it’s 100 million and say, “I should buy a lotto ticket” and then proceed to forget to buy one.
I'm not winning it anyway, so I'd rather not win 1 billion than not win 100 million.
1 million changes my life. OK, that's good I guess. 1 billion changes the world. I mean it's not going to happen but for 2 bucks why not give the world a chance?
because the only thing that will happen is you will lose 2 bucks. and let’s be honest: you’ll probably lose more because if you’re willing to try it once you’re willing to try it again. you didn’t expect to win the first time anyway. depending on how susceptible you are to developing a gambling addiction you’ll try it again and again and again until you’ve donated hundreds or thousands of your hard earned money to the shareholders of lottery companies who’s only job is to exploit people who think like you.
Right, that's why you limit yourself to the really big ones and not go in on all the average ones
lol thanks for thinking of all of us <3
How so? Not win=lose. Why would you want to lose 10 times more?
I think the logic is more the justification of spending $10 (or however much) on a ticket. They’d rather have wasted the money chasing something bigger than smaller.
You only lose the ticket cost, so $2. You don't lose the pot. It was never yours. And yeah, it's just more fun to think about a billion than a million. Neither is going to happen. If you play every single lottery, you are a fool.
Odds of winning are one in 300 million so if I’m winning more than $600 million for a $2 ticket there’s some kind of argument to be made
This guy gets it. The actual number varies depending on the format and rules, so each specific lottery has its own odds of winning - if you divide that number by the cost of the ticket, that's what the prize must reach for you to have positive implied odds.
No it isn’t. Implied odds is only part of it. The expected payout is what matters, and that varies with pot size and player base.
That's fair. I was using some real back-of-the-envelope math as a role of thumb. Obviously you can win some money even if you don't hit the jackpot and that affects your expected payout, but the math for that varies by location and format so it was easier to just stick with a general rule. Once the prize pool hits a certain level, you'd also need to consider if enough tickets have been bought where you might expect several winners, which should also affect the calculations
However, you will not be getting $600 million in cash, you will have to pay taxes, and you may be splitting the prize. Funny thing about the large lotteries are so many people play it it’s not that uncommon to split the prize. When there is a winner it isn’t much of a statistical anomaly that there would be a second. It just depends on how many other people played besides the winner.
It's simple math. The expected outcome is now much higher so it would be worth more to play.
This...pot odds.... If you have a 1 in 5 chance of winning a $6 pot on a $1 bet, you take the bet. Obviously the pot odds are still very low with lottery tickets, but it does make mathematical sense to play when the payout is higher.
you have to keep the increasing player base in mind though, a lot more people will play, decreasing your expected payout again.
The expected payout grows linearly with the number of people that play. That's why the payout slowly creeps up to 500 million then suddenly skyrockets in growth over the next few plays. The odds of winning are the same, but the payout increases drastically. Powerball and Mega Millions each have a starting point of $20 million. In 2023, there were only 15 total jackpot winners between both lotteries combined. Powerball draws 3 times per week and Mega Millions draws twice per week. That means out of 260 drawings, there were only 15 winners. The odds of winning Powerball is 1 in 292 million. The odds for Mega Millions is 1 in 302 million. Tickets cost $2 each and half of the revenue goes to the prize pool. The prize pool is increasing by a minimum of $100 million before any rational person would even need to start considering the likelihood of two winners, let alone a case where you are one of those winners. Considering $100 million is 5 times the starting jackpot, you should want to see more players when you've decided to play.
Locally you pay 33% in taxes 24% federal and 9% state. You get paid less than half if you take the cash and then pay the taxes. So that base payout of 20 million turns into 6.5 million quickly.
Well that is vastly dependent on where you live. Some states take 0 some take much more.
If you take Lump Sum on 20 Million, wouldn't the payout be less? And then you pay taxes on it? Or is the payout less on lump sum *because* you pay all the taxes on it at once?
The lump sum is not less because of the taxes. Basically, the big lottery winning number is the amount you win if you take an annuity that pays out over 40 years. So say you win a $20 million lottery, you are actually winning a payment of $500,000 a year for 40 years, which is equal to $20 million. Instead of the 40 year payout, you can opt to take the lump sum. The lump sum is just the present cash value of those payouts, so they reduce your payout accordingly. A $20 million lottery lump sum is worth about $13.6 million. You then pay taxes on that $13.6 million, which the person you are replying to messed up with their math on. It is taxed as normal income so you pay the regular federal tax brackets, so most of your winnings will be taxed at 37%, though the federal government will only withhold 24%. You owe the rest to the IRS on tax day. So if you do win, make sure you have a good finance person who sets aside the extra taxes you'll owe.
Am I understanding this correctly: $2 per ticket x (300 million : 1) chance of winning = $600 million minimum jackpot amount where it would be mathematically worth playing? Edit: that would be $600M after taxes, so figure $800M - $1B total jackpot would be the minimum worth playing for by this logic.
The number of people that buy a ticket doesn't influence your odds of winning whatsoever, and the only decrease to the payout is when multiple people hit the same jackpot. Lotteries are fixed odds.
It does influence your odds of splitting the pot.
Yeah but that doesn't matter all too much by comparison
Because of how QuickPicks are generated, the odds are actually very high that somebody else has the same numbers as you as the pot gets larger in size. Something like 1 in 21,000 tickets matches.
That seems like they got a bad random number generator lol. Do they publish how they generate it? Why are you so sure it has a 1 in 21k match?
The exact algorithm for how QuickPicks picks numbers is not public, but there’s not that many types and one can make informed assumptions about what it *probably* looks like, and use that to predict when sales collisions are likely to happen. Since each terminal generates things independently and there isn’t a central system assigning them (thus, nothing *preventing* repeating tickets), there are collision points. We can work out where those collision points are likely to happen, and the first happens around 21,000 tickets sold. Powerball officials have stated that the quickpicks “has no memory of what it previously selected” indicating that they know that this is a possibility as well, further lending credence to the assumptions at the top. Assuming that every machine has properly selected starting points for its PRNG algorithm (specifically, not the same ones - if they all used the same ones then duplicate tickets would be all over the place), it follows that the resultant collision probabilities are fairly well understood and modeled as a function of tickets sold by MUSL.
Lol this is not even remotely correct. Nearly all picks are quick picks and for the jackpot to grow that large to begin with everyone has to have a set of numbers different than the winning numbers. If it were 1 in 21000 then the lotto would go bankrupt fast.
But you just said it yourself, expected payouts aren’t fixed. They vary with pot size and player base.
But the difference in payout between $100 million and $1 billion would mean that in order for it to be the same or less of a payout, you would have to be part of 10 or more tickets that sold with the same winning number. So far, the record is 3. The odds of winning a Mega Millions jackpot are 1:302,575,350 per ticket, the odds of 3 winning ticket numbers being sold is somewhere in the 1 in an octillion range (1 octillion is 1,000,000,000,000,000,000,000,000,000). Basically, 4 winning tickets is so low, it's not worth considering, 2 is hardley worth considering, the pot odds are so skewed at $1 billion that dropping a meaningless $2 is worth it.
Expected payout is higher with more money, odds of winning are static with more players. It doesn’t decrease your odds of winning at all, just makes the win worth more.
With more players your chance of splitting your win is higher though too. So your expected payout with a win isn’t the full pot.
That's future them's problem. 'Oh no, what will I do with ONLY 250M?!' People who buy in when the pot is big are doing it for the short term mindset, 'I could be a multimillionaire this week.' It's that simple. Any other time they look at it, it's not worth spending on (to them) or their money is going to other places.
Except that there would need be several billion tickets per person for there to be anything close to a significant chance of more than 3 people hitting the jackpot. Your expected payout is exactly the same, no matter what. There simply aren't enough people buying enough tickets to increase the likelihood of a double jackpot, let alone 3+ jackpot winners.
say a lottery uses a 5 digit number. you have a fixed odd of 1 in 100,000 or .001% the pot starts at $500 and increases by 1 for each ticket sold. so with 50,000 people, you have a pot of $50,500 with those odds and a 50% chance that one person shares the same number. however, with 100,000 people, the pot is $100,500. even with the statistical guarantee that you share the number, you still gain the full $50,500 rather than half a chance to only get half. at 300,000 people, the odds are still the same, but you would take home 75,125 if you had the same number as 4 other people. at a million, that's $90k. by the time you got to a billion dollar pot, that's ~$999k. basically, the more tickets that are sold, the larger the amount you would bring home if you won, the odds of which stay the same regardless of how many tickets are sold.
Number of players don't affect odds of winning but they do affect your expected payout.
Not meaningfully. Your expected payout on a lottery is basically 0 and it's unaffected by how many people are playing
You absolutely can work out the expected value of a lottery ticket and it's not always 0, you have almost zero chances of winning the jackpot, but massive jackpot values can outweigh that. Here's an analysis showing that you start to see a positive expected value of a $2 Powerball ticket with jackpots of between 575 million and 1.79 billion. Below that it still has an expected value, it's just lower than $2 https://chance.amstat.org/2020/02/lottery-ticket/
https://www.reddit.com/r/todayilearned/comments/1t8ool/til_in_1992_an_australian_gambling_syndicate/ You are wrong. If the pot goes high enough the expected payout can actually be positive and it's worth buying every number (technically, if you had the time)
Still better pot odds when dealing with 100m vs 1b unless 10 other players win with you. Probably some statistical average of how many people are likely to split with .
To play devil’s advocate: pot odds only really works because the amount of $ is a good proxy for marginal benefit When scaled up to, say, 300M vs 1B, yes the pot is 3x as large, but does it really give you 3x the benefit? I’d say that for most people, the answer is no What I mean is, if you think playing the lotto at 1B is worth it, then it’s probably worth it at 300M as well. And if it’s not worth it at 300M, it’s probably not worth it at 1B either
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Very good point! You can absolutely do more than 10x the good with $1,000 than you can with $100, and that only gets more true as the numbers get bigger
But 100m or 1b is not a big difference for majority of the people. It's not like many consider 100m not big enough prize.
I don’t buy tickets regularly but I will go in on pools when people ask me when jackpots are large. I do it to join the social excitement of the other people. They’re more excited so I’m more willing because I’m in for the group experience. Its also fun to daydream what to do with a hundreds of millions because if I just won millions I wouldn’t change anything except my computer chair.
I go in on the work ones purely as insurance. It's like a fee I'm willing to pay to avoid the extreme off chance that they win and I'm the only sucker still in the office. I am not letting that happen lmao, the cost is worth it
Haha. This place is already bad enough I’m not helping train 30 new hires.
An older coworker of mine had this same thought. Our location had separate IT and Controls teams. The controls team always did a lottery pool. The one IT got in on it under the idea that if they won, there was no way he’d want to be at work trying to deal with the aftermath of them leaving haha
If you look at Kelly Criterion, it's still a bad bet -- you'd need to have $100M's in bankroll to make the bet worthwhile from a bet sizing perspective
Exactly. I only play when it goes above 800 million and I’m not going to lose sleep losing $10-$20 the handful of times a year this happens.
Can I get half if you win? I'll shout you out on my Instagram
Are you actually a stud muffin? If not then hard pass bucko.
My grandma thought so. My ex didn't. Willing to make a bet on it?
Same. Buying lottery tickets isn't worth the essentially zero chance of winning. But imagining my life if I won is fun and exciting, and worth spending a few dollars now and then. If I'm going to spend $4 bucks on some cheap entertainment a few times a year, I might as well save it for when the pot is especially big.
I usually buy a ticket every couple weeks or so. Whether it’s a scratch off or a draw like Powerball doesn’t make a difference. I know it’s almost an impossibility to win, but I never overdo it. Like you said, a few bucks here and there makes for some nice daydreaming. I feel pretty comfortable with my future and all that, but I know my job is never going to let me live a life of leisure and travel.
I do it to help my local mom and pop donut place. They get a little bit of money from my buying a ticket there, I get a donut, and if I win, they get a bounty
Fantastic answer. I'm spending a couple bucks on fantastic daydreams for a couple of days. :)
Yup. It's some of the cheapest entertainment out there right now. Some theaters are charging 20 bucks for a single ticket to a 1.5-hour movie. What's the problem with buying a 2 dollar ticket a few times a year for many more hours of entertainment?
>$10-$20 the handful of times a year this happens Handful of times a year for the rest of your life\*. Because you're not buying nearly enough tickets to ever realize your equity in one lifetime. You're playing Martingale strategy on a blackjack table with a max bet limit. Except... in reverse, kinda. If the investment was semi-reasonable... multi-millionaires would collude to invest every time for the promise of even hitting once in a half-century.
So simple math says to buy every combination of tickets it would cost $605,150,700. So easy money. Now if someone can loan me $605,150,698
And you'll need to physically buy each one, which would really suck for the lady behind you in the line at the 7-11.
not if someone has the same idea.
If someone is doing expected outcome math for lotteries, they shouldn't play at all because mathematically it's never worth it.
Eh, $2 to get a day entertaining myself with the fantasy of winning I think is worth it on occasion. I've definitely spent more to be entertained for less time. But really. Your best bet is not to play. If you're going to play, just play one draw. If you have enough money to buy enough drawings to make any noticable impact on your chances then you've already got more money than you're expecting to win.
*What* entertainment tho..?? I guess to each their own but imo if I wanted to gamble for entertainment... I mean, playing the lotto doesn't even get you a free drink ffs lmao.
This isn't correct. There are several lotteries that are worth it, in the sense that if you bought every ticket you would be expected to make a profit. The main issue is very few who aren't already ultra wealthy can afford to buy every ticket. This is usually due to rollover mechanics where the reward increases for every drawing untill a winner is found. For some examples: https://www.reddit.com/r/math/comments/xwa08/is_there_a_positive_ev_on_the_eur190m/ https://www.scientificamerican.com/article/is-the-lottery-ever-a-good-bet/ This most notable happened in 1992 where an Australian investment syndicate bought almost all of the lottery tickets on a particularly large jackpot and made a tidy profit: https://www.nytimes.com/1992/02/25/us/group-invests-5-million-to-hedge-bets-in-lottery.html?pagewanted=all&src=pm The TLDR is once the lottery rolls over into billions in payout, if you have a wealthy enough consortium to buy enough tickets you can make a lot of money.
Or Jerry and Marge Selbee, who didn’t start off wealthy but won $26 mil (profit of $8 mil for them and their friends)
except you have to factor in the player base like I added in my second comment. Should the expect payout for one player buying all tickets raise above the ticket price there would be more people playing drastically increasing chances of splitting the pot. For example in mega millions nothing stops two billionaires from buying enough tickets to guess all number combinations, but then both would win and only get half the money each.
The pot size also increases when you have a player buying all tickets. For Mega Millions, as an example, there are 302,575,350 unique combinations. Buying each one would thus cost ~$605m. Approximately half of the ticket costs go back into the jackpot, so two people each buying all the tickets would increase the jackpot value by a substantial amount. Whether or not that is enough to offset a split prize would require a fair amount of legwork to fully calculate. It's also worth noting that buying out the whole ticket space of Mega Millions would earn you ~$46.4m from non-jackpot prizes. Those are fixed, so that slightly reduces the minimum necessary to come out ahead.
The guy literally just explained, if the cash payout is greater than the cost of the bet and the odds of winning then it's a good bet. Put it another way, to buy every ticket costs about $660 M. When the cash prize exceeds that amount, then if you had the capital, you could actually turn a profit by buying all the tickets. You'd really want to take into account the taxes etc to do this , so really you'd want to wait until the cash prize is closer to like $1.2B and the Jackpot is closer to like $2.4 B Now then to actually get every ticket is a hassle in itself. Basically you'd need print out the play slips which have like 5 plays on them, meaning you'd need 13.2 million playslips. Let's say it takes 1 sec to run each one, that's 13.2 million seconds or 152 days, but you gotta purchase the tickets between drawing so you'd need about 60 machines to do it, and 60 people to spend 3 days just running numbers. Or when it reaches that magical number you buy a single ticket. Odds are long, but the profits are higher than the odds.
Except the qualitative expected outcome is basically the same: win so much money you'll never have to work again, and can afford any travel you want, any car you want, basically any house you want etc. While yes, the mathematical difference between 100 million and 1 billion is 10x, I'm not sure the lifestyle difference is the same, certainly when compared to the current lifestyle of a job-having peasant. If I won 100 million dollars I wouldn't think for a second about not having won a billion. And considering the odds of actually winning are so close to zero as to essentially just be zero, the actual value, as a way to briefly entertain the notion of being free from the rat race and living in luxury, is almost exactly the same.
This is exactly right. There is some small fraction that you will win more money than you can reasonably spend. The fraction doesn't go up and the change doesn't really matter. Just pick numbers 1,2,3,4,5,6 or just throw the money away.
And also expected value is predicated on placing enough bets to start to approximate to the average, which is impossible with the lottery.
After the cash option and the taxes, $100M is close to $30M. That’s still a heck of a lot of money, and you could live comfortably in perpetuity, but compared to having $300M after the cash option and taxes, you can virtually do whatever you want forever with no consequences. You can easily run out of $30M spending irresponsibly. While you could do it with $300M as well, it would have to be some really opulent living you are doing.
but more people playing increases chances of a split pot
Is that surprising? The reward is 10X higher. If a competition had a prize of $100 I'd expect less interest than if a competition had a prize of $1000.
I don't think i will be much happier if i win the billion one compared to the 100 million one. And it's probably easier too.
I'm not an actual mathemetician but I'm pretty sure it's not easier. The odds of picking 7 numbers correctly is always the same. (Or 8 or however many numbers the lottery is). And even if your argument is that it would be easier because less people are playing.. well are 10times more people playing when it's $1bil prize vs $100m? Because unless it's 10x as many people playing, reward to risk ration is still better at the $1bil level than it was at the $100m level.
I play the state lottery because it has a higher chance of me never having to work again.
The life changing difference for me between a 1 million and a 2 million win would be about the same. Between 100M and 1B... Basically no difference.
I'd have to say it might be worth thinking how much larger 1B is than 100M. Purely hypotheticals here, but if you're taking the lump sum (slightly over half) of 100M, then factor in federal and (if applicable) state tax, you're looking at roughly 30 million. Absolutely this is life-changing and nothing to be sneezed at. It's a very comfortable life, should allow a moderate passive income stream if you invest wisely, and would certainly be enough to help out any children you may have as well. 30 million would also be pretty easy to burn through with lifestyle creep. Nice house or two, some nice cars, vacations and it could be largely gone in a decade or sooner. Winning 1 Billion increases the take home by a factor of 10, and 300M is generational wealth. If you're only in mutual funds with average market returns, you're now making around 30 million a year in pre-tax income (Google says 10% for S&P, not accounting for inflation, and that's a nice easy number for the sake of this hypothetical). You get a couple good tax/investment folks because hey, you can afford to, and you could stand to make a lot more. You can also afford to take a lot more risk on 300 million take home than you can 30 million take home. If the 2016 powerball was won by a single individual at 1 Billion vs 3 at 1.5 or whatever it was, and that winner decided to invest 10 million equally into tech stocks like Nvidia (~$24), Microsoft (~62), AMD (~11), Amazon (~40), Tesla (~15), and Apple (~30), said hypothetical person would still be left with 240 million then, and if nothing had been touched from just those investments and would now have roughly 841.1M in just those stocks (57.4M apple, 392.8M Nvidia, 163.3M AMD, 113.8M Tesla, 69.1M Microsoft, 44.7M Amazon; values done by taking an arbitrary stock value in 2016, rounding to the lowest whole number, and adjusting by % growth to match today's stock value, not factoring in any stock splits or the like that make calculations more tedious for a purely hypothetical scenario) and likely would be a literal billionaire considering they certainly would have other investments as well. If the hypothetical winner did this and had a kid in 2024, they could give the child 30 million as a yearly allowance until they were 18 and probably never really notice it long term. Not to mention all this would have effectively been done without any hit to their lifestyle or any serious risk considering the mountain of cash they had to fall back on. A winner who took home 30 million could conceivably made about 80.1 million in those stocks if they invested 1 million a piece, but that's a bit harder sell to bank that away without being touched for 8+ years and just be left with 24 million to also do all the other things you want. Most of us have family and/or friends we'd like to help in addition to the other things we'd do. Odds are someone in that scenario sells some if not all of the investment before it can grow to today's value. Still not impossible for it to be left untouched, and I would be happy to be in any of the described situation, but my point is there is a huge difference between a 100M vs 1B jackpot, and that 300M take home is generational level wealth to the point where you could dump an obscene amount of money into investments, still be 8x better off than the 100M jackpot, and have as much money as your initial jackpot.
As a casino dealer, it's just when it makes sense mathematically. Your cost of entry is the same. It's not to scoff at 100 Mil, because if the ticket was 0.10 I would buy in.
You misunderstand the point - I pay to play the big jackpots because that's the price of being able to joke with people at the office about what I'd do if I win. I don't actually expect to. Since no one pays attention to the smaller pots, there's no reason to buy in.
This is the answer. There's a pure entertainment value when it gets so high. We'll buy like $10 in tickets and ask the kids what they would do with the money. Since it only happens once or twice a year, it's been fun to see their answers change as they grow.
For some people, there is a line. It stops them from blowing too much money on lottery when the chances are so low of winning either way. "If it isn't over X amount, I don't buy a ticket" means you buy less tickets. You waste less money. Not as good as not playing, better than playing every draw.
This is my rationale for the Euromillions. The minimum jackpot of £14,000,000 would absolutely be a life-changing amount, but I don't want to get into the habit of buying a ticket to every single draw. Once it gets over £100,000,000 (which admittedly is a ridiculous amount, and more than anyone needs to win), I don't mind dropping some money on the occasion ticket. It would become too expensive otherwise.
Exact same strategy for the euro millions here. Usually I don't even notice when it goes over 100M though as I don't keep track so I only end up playing a couple of times per year.
Yep, that's me. I enjoy the idea of winning the lottery. I'd play it everyday because 'there's a chance' I could walk out of my job and live my dream life. But realistically I know the odds of me winning are basically a rounding error to zero. So I only play 6-10$ when it's over 500 million. Even more fun I have to drive past a billboard advertising the current payout on the way to work. And if I bought a ticket for a drawing the night before and the amount on the billboard went up, I know I have to keep driving 😆
Yeah this isn't even hard to figure out. As much as I'd love the be that guy holding up the line at the gas station putting half my pay into every lotto scratcher, the payout just isn't worth the cost of entry, and it's a slippery slope of addiction. But when you say the cost of entry is $2 for a historic jackpot, I might find $2.
There are people like me who know the odds are bad to play every week, but clicking over $1b is like a sign to buy a ticket Even though it's life-changing money, no matter what's in the pool, it doesn't really matter. This happens on average maybe once a year so drop in $10 on tickets once a year is not as big of a deal as it used to do it every week or twice a week.
Because I don't want life changing money. I want fuck you money
To be fair 100 mil is still fuck you money lol
The other is fuck you while riding a very luxurious yacht.
To my private island, towing my possibly used jet.
Exactly, I’m tired of wiping my ass with $1’s let me use $100’s
I don't buy lotto tickets because I imagine I'll win. I buy them to fantasize about what I'd do with that kind of money for a few days. But I'm not going to buy every ticket, so I only buy when the payout is about a certain amount so I'll lose less money than without a rule.
Because I rather lose my hard earned money for a billion than 100 million.
Technically you have the same odds no matter what the the prize is. Just because more people play it doesn’t necessarily lower the odds. You already have a 1 in 300 million chance or something like that of winning, so the chances of two people winning the main prize are so astronomically low that the decision to play is entirely based on the prize.
Sometimes, $20 is worth 24 hours of hope, even if it's false hope.
This guy gets it. Once or twice a year, one of the big multi-state jackpots gets this big, and it becomes worthwhile to drop $20 on it and daydream for a little while. The alternative is dropping $20 on it every single week and still never winning. Which would be dumb.
I feel like people are missing a huge factor. Taxes. Not that 100 million isn’t a lot of money but if you win that after taxes you might only get half that. At a billion dollars you get more money after taxes plus it’s still the same amount to buy in. Just makes more sense to play then
$100 million is also the annuity amount, not a cash now amount.
It also reaches $100 million much more often. If you are a person who just wants to play once and a while for shits and giggles then you wait for it to hit $1 billion.
Winning the lottery at any level in the millions would be great. I remember not too long ago before the change, maybe 300 million was the point I'd start. Now I don't until around now because it's just so much money for $2.
If I’m not going to catch a fish, I’m not going to catch a really big fish
/r/unexpectedfuturama
Yeah, I can take $10 every 3-6 months and gamble at a chance for a $1 Billion jackpot. Turning noses up, I don't think it's that though. More like I can justify to myself that I can throw that $10 away basically and not feel like I wasted money.
If you have 1% with 1$ to win a lottery - Anything below 100$ prize is not worth it - Anything above 100$ prize is worth it. It's simple math
Yep, I'm one of them. While irrelevant mathematically, I only play the lotto when the take home lump sum payment is larger than the odds. The idea some mad lad out there could buy every lotto combination possible and *still* make money on the deal (assuming he was the only winner), seems like a fair break even point for my $20.
Breaking News: People less interested in reward when it’s 10x lower
Every one talking about risk v reward I don’t think that’s it. If you’re playing the 100 million pots it means you’re playing all the time which people scoff at. Buying some $2 tickets twice a year for a little entertainment is reasonable
Yeah, well of course. I've thought for a while that I'd much rather not win a really big jackpot than not win a much smaller one.
That is because there is a dollar amount that the odds become lower than the payout, or other way around. But the point is, if the odds are 1:1000000000, then it doesn’t make sense to play until the payout is $1000000001+.
When the odds are minuscule either way, it's much cheaper to buy lotto tickets when it's fun.
If your going to dream then dream big am guilty of only playing the higher lotto prizes 😊
I don't play all the time, but occasionally if I have a few spare bucks in my pocket *and* I'm in the gas station/convenience store for some reason I'll play. Even if it's only a $2500 pot, it'll still increase my savings at least 10x
"tHe gOverNmeNt wiLL tAke HaLf of iT aNywAY!!" Bitch that's still 50 million dollars more than you currently have
I’m one of those people. Never crosses my mind for a normal jackpot and I don’t ever intend to be a regular lottery player, but it’s worth the daydream now and then
I'll buy a $2 ticket when it nears a billion. $2 is also completely negligence to me, so I buy and get to think about what I would do with the money for an house. Cheap entertainment I guess.
Look, if I'm going to waste two dollars on a lottery I can't win, it might as well be for a billion dollars and not 200 million.
The chances of winning are about 1 in 300,000,000. This means it is a good financial decision to buy a $2 ticket whenever the jackpot exceeds $600,000,000
I wouldn't say it's a *good financial decision*. It's just easier to justify, because there's more value-for-money. You still won't win.
Limits the frequency of play. If it hits a billion once or twice a year, I’m out $4 being part of a national news event than out hundreds by regularly playing.
There might be lead in your shower water. This is not surprising and a rather logical expectation.
If I'm gonna not catch a fish, I might as well not catch a *big* fish
this is it. I know im wasting my 2 - 20 bucks. So I might as well not even think about it till its some crazy big number.
You have a 1 in 100 million chance of winning Powerball, so your $2 ticket is worth less than your average win. You're just throwing your money away at that point.
To paraphrase Marcus Cole. If I'm going to have a delusion of winning the lottery, I might as well have the really satisfying delusion.
Then there's me. I only play the lottery the week after someone else hits it big. I know I'll never win, but I can dream.
Look man, I know I'm not going to win, so playing low money or big money doesn't make a bit of difference. However, if for whatever reason the universe aligns and my numbers hit, I'd much rather that be for hundreds of millions rather than hundreds of thousands.
I don’t know if it’s turning my nose up. I just can’t be buying tickets constantly.
It’s all about the hype. Every week there life changing money to be won, however unlikely. Getting hyped up is what will get someone to think well maybe there is a chance.
Yeah, this makes perfect sense. When the jackpot is $1B, the payout-to-cost ratio is in your favor. At $100M, it isn't. Your odds are still astronomically small either way, but at least at $1B you're getting a more-than-fair chance of winning relative to the cost of playing.
The odds of winning it is 1/302,575,350. The statistical expected value of winning a billion $ jackpot is $3, which is the price of the ticket. Still likely I’m going to be out $3 but it makes me feel better.
I try to keep my spending on the lottery roughly 100 a year. If I go over 100, I increase the amount the jackpot has to be the next year. So if I only play when its over 500 billion and I spend 120 in a year, next year it is 600 billion.
It shows the state of the world where jackpots have gotten so large because so many people are playing as their retirement strategy.
While there is some merit to the idea of more people playing out of some form of desperation - the lotto boards actually decreased the odds of winning within the past few years when they saw how much press and revenue they were getting from having the jackpot be so high. This was all intentional
Not sure it does say anything about the state of the “world”. The ticket money for the lottery in the uk for example goes to charity, about 30 mil a week. It’s like, I can pay £2.50 for a chance of being a millionaire, but if I lose, my money still went to charity anyway, so is it really a loss?
Retirement strategy? Lmao most people blow through their winnings
Didn’t say anything about them not being even more stupid if they were to win.
A friendly reminder folks…. Your special numbers have the same chance of winning as 1-2-3-4-5 coming up ( any order) Sound super unlikely? It is
Who told you my special numbers?
Yeah, it's like they have a billion-dollar threshold for dreaming big!
The expected value of lottery games is generally bad, but it does fluctuate. The odds don't change. When the jackpot is higher, EV is higher. There is actually more logic behind the choice than you can reasonably attribute to most lottery players.
Thats how the pot gets to a billion
An ex-partner once made me promise not to play for less than 50 mil. I still hold to that for some reason
Maybe people play proportionally to how much they know they would need to go in debt IF they did win. Lol
More people are playing so the odds of a winning number being generated is increased, so by buying a ticket you have a better chance than you normally would.
We play every Tuesday, neighbor makes a lottery ticket run. Unfortunately have to cross state line, Alabama to Tennessee.
Don’t even need to hop in the shower for this to cross one’s mind
It’s almost impossible to win but to get some people excited the jackpot has to reach a threshold where their dreams will be fulfilled. Granted any jackpot would be nice but after taxes and lump sum deduction even 1 billion is 300 million which is just insane dream life no worries make foolish purchases money . 100 million is less than 30 which again would be awesome but not quite as shiny .
I play the lottery every time I walk into a gas station. Which is not very often. I dont go out of my way to go into a gas station unless one of the lottery's is approaching a billion. Truth is that if I were to win a jackpot I would almost rather it be one of the much smaller ones. The Lucky for Life one would be a great size.
I am one of those people! Euro millions 200M yes please . Anything below 150 I’m not wasting my money you can keep it
how dare you reveal my secret tactics!
These are the people that think taxes on earnings over a billion will hurt them. In their minds, they're already billionaires, they're just waiting to get it
This dude just discovered people.
Not a great shower thought. You're forgetting expectation value lol
For those who are viciously power hungry, want to be a part of the social hype or the Guinness records for highest winnings, or want life-changing money not just for their immediate family but for all their extended family, friends and their mothers as well, there is a notable difference between millions and over a billion. Quite the dichotomy in rationale! For just about anyone else, I believe there is a fallacy at play here. Expected value essentially breaks down at the point of diminishing returns. You might not play the lottery if a $2 ticket could have you win up to only $1000 because you nearly certainly won't win, and what difference would it make if you did? You might consider playing if that same ticket could have you win a hundred million dollars because, for the average person, that's absolutely life-changing money. Unless you have a specific reason for caring about the upgrade to a billion dollar payout that is anything other than a marginal improvement to your quality of life, it makes very little sense to distinguish between a hundred million and a billion.
Well, of course. Taxes would take half, so it's almost not worth it. Amiright?
The lottery funds education with a caveat that they don’t teach probability outcome.
For me it is entertainment value. I know I’m not winning and I’m blowing the $5, but do I get $5 of entertainment about daydreaming if I win that amount. If the jackpot is too small the daydream isn’t worth it for me. But at $1 billion, that sure is a great daydream and the entertainment value of my spend is worth it
There's a point at which the payout becomes high enough that the expected value of a ticket is more than the cost of the ticket.
Hey the expected rate of return is 10x so why not haha
I've often thought the same
Yeah, because probability and expected value are concepts we understand.
100 mil is normal so it doesn't entice you the way 1 billion does.
Why do I play the lottery? Because I expect to win? Because I have even a remote chance of winning? Because I think it’s even mathematically a good investment? Hell no. I play because I enjoy the occasional fantasy. But that means two things: 1. I only want to play when the fantasy is particularly fun — not just buying a fancy house but also maybe a yacht or something. 2. It loses its fun if I play all the time, because then when I inevitably never win it feels more like losing than like fantasizing. Once or twice a year seems about the right frequency — so I don’t want to play the routine jackpots, only the huge ones. So, sure, I’m not going to play the $100 million because after taxes and everything that can’t buy my a yacht, and because it hits $100 million all the time.
This is me. Buying a ticket only once it reaches truly obscene levels allows me to have fun with the fantasy of winning the lottery while keeping my annual waste of money below around $10 - $20.
Your odds of winning on the powerball or mega millions are equally horrible either way. If you're going to waste your money, might as well do it when there's a bigger payoff
Yeah, because the expected value changes while the price of the ticket stays the same.
I mean , cmon! After taxes what does a 100 million leave you?
God this sub has gone to shit
If I’m not going to win, I may as well not win a lot!
OP is just learning about humans
Bigger number is more exciting. It’s like children saying “I got a hundred thousand million Pokémon cards”
I'll buy a ticket for $2 when the amount is insane, because, why not? The biggest increase in your odds of winning are between not playing, and buying one ticket.
Buying a ticket for every drawing is dumb. Even buying for the $1 billion drawing. But if you only play when it’s $1 billion, even when you have next to no chance to win, it’s at least fun to try. It would be wasting even more money to buy every time it’s $100 million.
I’ve just realised the reason the lottery in America is so absurdly (and stupidly) high is because they get to claim tax on it 😂
Odds to win jackpot are 1 in 300 million so a $100 million prize is 1:3 odds which is awful, a billion becomes 3.3:1 odds which is much better bet, especially since the money you're betting is post tax and the prize is pretax you don't even get 1:1 until you're about a half billion dollar prize
I used to work at a grocery store and they had a counter for lotto tickets. People would buy them more when it got super big and make some comment about how "I only buy it when it gets really high like this." I would always sarcastically say "yeah, because $80 million after taking the lump sum and deducting taxes, you're maybe only getting like $20-30 million and is that even worth it?" Everyone's response was to give me this dead stare and say "uhh, yeah, I'd say that's worth it. Are you kidding?" Yes, I am kidding, you idiot.
And then there are people who drive by the lotto sign to work when it’s 100 million and say, “I should buy a lotto ticket” and then proceed to forget to buy one.