# Is this lottery factoid bogus? **URL:** \ **Category:** Cecil's Columns/Staff Reports\ **Created:** [September 30, 2013, 9:23pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039 "2013-09-30T21:23:27Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Irishman](https://avatars.discourse-cdn.com/v4/letter/i/b487fb/32.png) [@Irishman](https://boards.straightdope.com/u/Irishman)\ **Post date:** [October 1, 2013, 6:13pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/21 "2013-10-01T18:13:10Z")
> [@Melbourne](#): > > In the 80’s, when legal lotteries became more common, people started to notice that if the Jackpot got big enough, you could win by buying all the tickets. Even though say 50% of the money went to tax and profit, if the jackpot is 200%, then you win 200% \* 50% = 100%. If the jackpot is more than 200%, and the tax + profit take less than 50%, you come out ahead. I don’t follow: 200% of what? Personally, I think it would be much less shady if lotteries stated the prize value in the immediate cash value, not some annuity total. They could state the prize in the cash out value, then helpfully set up that annuity for you if you desired. It strikes me kinda like a salesman telling you he can get you that car for $50 a month. What he neglects to mention is that is at 27% interest compounded monthly for the next 36 years. ---
**Author:** ![aNewLeaf](https://avatars.discourse-cdn.com/v4/letter/a/ac91a4/32.png) [@aNewLeaf](https://boards.straightdope.com/u/aNewLeaf)\ **Post date:** [October 1, 2013, 6:56pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/22 "2013-10-01T18:56:15Z")
> [@Irishman](#): > > I don’t follow: 200% of what? Of the payout. Paying a dollar for a one-in-a-mllion-chance of winning a million is a fair bet. Paying a dollar for odds of 10 million to one, with a payout of a single million, gives a house advantage of 90%. You only get 10% of the prize for how much risk there is. ---
**Author:** ![crypto](https://avatars.discourse-cdn.com/v4/letter/c/b3f665/32.png) [@crypto](https://boards.straightdope.com/u/crypto)\ **Post date:** [October 1, 2013, 6:59pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/23 "2013-10-01T18:59:57Z")
> [@Yllaria](#): > > You know, I think that’s the best way to look at it. For two tickets. Or so. If you can afford it. I remember one local lottery winner being quoted as saying he had been “investing” $25/week from his minimum wage job for a year and was starting to lose patience . . . so he had been considering doubling his “investment” to make it pay off sooner. > > My jaw dropped. I figure for every winner who’s done that there are thousands of non-winners doing the same thing. That is such a very, very bad idea. > > Entertainment, yes. Investment? NO. The lottery isn’t called the “idiot tax” for nothing. ---
**Author:** ![crypto](https://avatars.discourse-cdn.com/v4/letter/c/b3f665/32.png) [@crypto](https://boards.straightdope.com/u/crypto)\ **Post date:** [October 1, 2013, 7:04pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/24 "2013-10-01T19:04:53Z")
> [@aNewLeaf](#): > > Of the payout. Paying a dollar for a one-in-a-mllion-chance of winning a million is a fair bet. > Paying a dollar for odds of 10 million to one, with a payout of a single million, gives a house advantage of 90%. You only get 10% of the prize for how much risk there is. What kind of lottery are you talking about? Say its for a Megabucks type lottery, where 7 numbers out of 50 must match, plus a bonus ball (or whatever the config). Your odds of winning don’t change because of what the lottery is worth that week. If it’s paying 1 million or 50 million, your chances of winning are exactly the same. Maybe I’m confused with what you are saying. ---
**Author:** ![aNewLeaf](https://avatars.discourse-cdn.com/v4/letter/a/ac91a4/32.png) [@aNewLeaf](https://boards.straightdope.com/u/aNewLeaf)\ **Post date:** [October 1, 2013, 7:08pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/25 "2013-10-01T19:08:30Z")
Right. Odds stay the same, but the payout varies. If the jackpot is 50x normal, your odds of winning stay the same but the house advantage is reduced by a factor of 50. ---
**Author:** ![Malacandra](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Malacandra](https://boards.straightdope.com/u/Malacandra)\ **Post date:** [October 1, 2013, 7:46pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/26 "2013-10-01T19:46:50Z")
> [@glee](#): > > Hey, I’ve been to Las Vegas! 🆒 > A one dollar casino bet with whooping crowds of fellow gamblers, one-armed bandit bells going off and gorgeous cocktail waitresses beats the hell out of losing money in a lottery. > > P.S. Here in the UK we have Premium Bonds, which is a lottery with a **positive result every week**. (Currently 1.3% in our favour, but (from memory) it has been as high as 4%.) > > You should have one of these schemes in the US. But of course the money being paid out in the Premium Bonds is taken from the earned income from the money invested - as if you’d invested in the stock market and punted your dividends on the lottery. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [October 1, 2013, 7:47pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/27 "2013-10-01T19:47:58Z")
> [@Telemark](#): > > It’s possible for a lottery to have a\*\* positive expected return\*\*. If you bet $1 your expected return is, say $1.5. Now, most of the time you’ll win nothing. But if the odds are 1/100,000 that you win and the payout is $150,000 then the odds are in your favor. But situations like that are very rare. And there’s no way to be sure that only one person will buy the winning combination. The bolded phrase might have been what the guy on the radio was talking about, however many years ago it was. It feels right. Thanks. There’s another way to look at lotteries, too. When California first started theirs, there were studies done on where the ticket money was coming from. The studies were done because many people had been vocally concerned that great swaths of poor people would be spending rent money on lotteries. It turned out that most people were spending money that they would otherwise have spent on junk food. This may have been partly a function of where the tickets were sold. Many are still sold in gas stations, quick marts, and grocery stores. So if, and only if, that’s where your lottery money is coming from, you can think of each ticket as a reduction of, say, 200+ calories. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 1, 2013, 8:07pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/28 "2013-10-01T20:07:07Z")
> [@Stink Fish Pot](#): > > If it’s paying 1 million or 50 million, your chances of winning are exactly the same. Think of it this way, you’re paying $1 for a ticket. If there’s 1 million possible ticket combinations and the payout is $1 million then you’re expected return over time is $1 for every dollar you spend. If you bought every ticket you’d be guaranteed to win exactly what you spent. If you bought a single ticket every week for a million weeks the odds are that you’d win back your money at some point. If the payout is $50 million and you bought every ticket your expected return over time is $50 for every dollar you spend. You could buy every ticket and be guaranteed a $49 million profit. The odds of winning are the same, but the expected rate of return is very favorable in the second case. If you only have $1 to spend you aren’t guaranteed the jackpot, but it’s a favorable bet in that case. In reality the payouts are more like $100,000 in setup above. The bet is very much in favor of the state, not the lottery ticket buyer. If you bought every ticket it would cost you $1 million but you’d only win $100,000 - losing $900,000 in the process. ---
**Author:** ![crypto](https://avatars.discourse-cdn.com/v4/letter/c/b3f665/32.png) [@crypto](https://boards.straightdope.com/u/crypto)\ **Post date:** [October 1, 2013, 8:34pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/29 "2013-10-01T20:34:04Z")
> [@aNewLeaf](#): > > Right. Odds stay the same, but the payout varies. > If the jackpot is 50x normal, your odds of winning stay the same but the house advantage is reduced by a factor of 50. What “house advantage”? In a lottery, there is no “house advantage.” Nothing they do changes, therefore the odds don’t change for the bettor. And the odds don’t change for the state (or “house”). The money collected for the payout is just accumulating each time the lottery goes without a winner, but they don’t get to keep it. It always goes back to the players, so I think your notion of “house advantage”, at least as it applies to lotteries, is wrong. There are a few things to consider. 1. regardless of the payout for a particular drawing, the entry fee to enter the lottery for each contestant per chance is exactly the same. 2. regardless of the amount in the pot each week, the state will continue to sell tickets at a rate equal to the demand. There is never a shortage, and the state will sell as many tickets as it can possibly print in the time before the drawing. 3. regardless of the amount in the pot, the state will always give the public a chance to win. They never just hold into all the money they’ve collected over the course of a month or whatever it takes to get the next winner and keep it. So the “house advantage” isn’t reduced at all. There is no “house advantage” in a lottery. It simply does not exist. 4. any rollover amount will be paid out according to the lottery’s rules. Since the runners of the lottery have no choice in running he next lottery or not, there is no house advantage or disadvantage. The lottery can’t be compared to a slot machine, craps, or any other game that has a built in set of odds skewed toward the casino. I think folks are using the terms “expected value” incorrectly. Or maybe I am. ---
**Author:** ![Irishman](https://avatars.discourse-cdn.com/v4/letter/i/b487fb/32.png) [@Irishman](https://boards.straightdope.com/u/Irishman)\ **Post date:** [October 1, 2013, 9:11pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/30 "2013-10-01T21:11:39Z")
House advantage is probably the wrong terminology for the lottery, but I don’t think expected value is. Expected value is how much you will get paid for how much you pay in. Theoretically the odds for the lottery don’t change regardless of how many tickets are sold. Each ticket combination has a set likelihood for being pulled up. The difference is in the payout. If the payout is 1 million, and you spent one dollar, and the odds are 1 in 1 million, then that is an even game. So if there is no winner, and next week the prize goes to 2 million, and the cost per ticket is still 1 dollar, then the expected value just doubled. This is different than a lottery that uses purchased tickets such that the ticket receipt goes into a bucket, and then the drawing comes from the bucket. The odds of winning that are determined by the number of tickets purchased. It doesn’t do you any good to buy two identical tickets. They are not going to pay you twice the money, once for each ticket. That might have been the case at one time, but it isn’t now. The pot is shared between the tickets, so if you have two tickets, you get two halves. Or if there are three independent winners, they split the win three ways. Or if there are two winning tickets, but one winning ticket was a pool of 5 people, then those 5 people will split half the pot 5 ways. Whereas if the winner is picked from the ticket pool, then it is advantageous to buy multiple tickets. That changes your odds of winning more than it changes the number in the pool. Say there are 100 people who buy a $1 ticket. That’s a $100 pool. Drawing picks the ticket stub out of a bucket. Assuming randomized bucket. Now buy two tickets. You’ve spent $2, for 2/101 chance of winning, instead of 1/100 chance of winning. That’s 1.98% chance of winning over 1% chance. Of course, with lotteries running on millions of entries, that changes the percentages to tiny changes. The thing is, for all the talk about how low your odds of winning actually are, _somebody_ wins. That’s why people play. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [October 1, 2013, 9:25pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/31 "2013-10-01T21:25:50Z")
> [@Melbourne](#): > > In the 80’s, when legal lotteries became more common, people started to notice that if the Jackpot got big enough, you could win by buying all the tickets. Even though say 50% of the money went to tax and profit, if the jackpot is 200%, then you win 200% \* 50% = 100%. If the jackpot is more than 200%, and the tax + profit take less than 50%, you come out ahead. > > An AUS company worked this out, got a large number of investors, and came over to the USA to invest in lotteries. They couldn’t buy all of the tickets (other people were buying too), but they bought enough tickets to win – and came out ahead. > > Then the executives took the money and moved to Israel. (For historical reasons, Israel has no extradition treaties for some classes of people). > > So that didn’t work out so well for the investors anyway. What a crock of shit. For a number of reasons, this could never have happened. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [October 1, 2013, 9:40pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/32 "2013-10-01T21:40:41Z")
> [@Melbourne](#): > > An AUS company worked this out, got a large number of investors, and came over to the USA to invest in lotteries. They couldn’t buy all of the tickets (other people were buying too), but they bought enough tickets to win – and came out ahead. > > Then the executives took the money and moved to Israel. (For historical reasons, Israel has no extradition treaties for some classes of people). > > So that didn’t work out so well for the investors anyway. You are _seriously_ misremembering [this](http://www.thursdaylotto.com.au/news/1992/3/12/syndicates-first-lotto-cheque-is-in-the-mail/) story. The investors were happy, nobody had to flee anywhere. It was determined to be all legit. VA changed some rules to discourage it in the future. ---
**Author:** ![Learjeff](https://avatars.discourse-cdn.com/v4/letter/l/94ad74/32.png) [@Learjeff](https://boards.straightdope.com/u/Learjeff)\ **Post date:** [October 1, 2013, 10:00pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/33 "2013-10-01T22:00:34Z")
> [@Illaria](#): > > And you should never buy more than one because multiple tickets don’t improve your chances noticably That part is incorrect. If you buy two tickets, you have roughly twice the odds of winning one share, and some (miniscule) possibilities of winning two shares. If you’re the only winner, winning that extra share is of zero value, but it’s a miniscule possibility anyway (compared to winning one share). > [@Stink Fish Pot](#): > > What “house advantage”? In a lottery, there is no “house advantage.” > … > I think folks are using the terms “expected value” incorrectly. > > Or maybe I am. Your points are true, but only one affects the expectation calculation: the number of entrants (which affects the number of winners dividing the pot). As long as the number of tickets sold is available, the expectation can be calculated. The Australia example above illustrates the possibility. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [October 2, 2013, 12:07am UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/34 "2013-10-02T00:07:24Z")
> [@ftg](#): > > You are _seriously_ misremembering [this](http://www.thursdaylotto.com.au/news/1992/3/12/syndicates-first-lotto-cheque-is-in-the-mail/) story. > > The investors were happy, nobody had to flee anywhere. It was determined to be all legit. VA changed some rules to discourage it in the future. But you have to love the way it was misremembered. ---
**Author:** ![John\_W.Kennedy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_w.kennedy/32/1031_2.png) [@John\_W.Kennedy](https://boards.straightdope.com/u/John_W.Kennedy)\ **Post date:** [October 2, 2013, 2:53am UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/35 "2013-10-02T02:53:52Z")
Back in the 70s, there was, for a while, one way to win in the Pick-3 games: bet 0-0-0 every day. A very large number of people apparently thought that 0-0-0 somehow wasn’t available to be bet, and so the first few times it hit, the few who chose it profited nicely. Eventually the proles caught on, though. ---
**Author:** ![Irishman](https://avatars.discourse-cdn.com/v4/letter/i/b487fb/32.png) [@Irishman](https://boards.straightdope.com/u/Irishman)\ **Post date:** [October 2, 2013, 3:59pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/36 "2013-10-02T15:59:26Z")
> [@Learjeff](#): > > That part is incorrect. If you buy two tickets, you have roughly twice the odds of winning one share, and some (miniscule) possibilities of winning two shares. If you’re the only winner, winning that extra share is of zero value, but it’s a miniscule possibility anyway (compared to winning one share). If you buy two tickets with the same number, that does not change your odds of winning significantly. However, if you do win, and someone else wins with that number, then it does give you two shares instead of one share. If you buy two tickets with different numbers, then that gives you twice the odds to win. However, you only get one share if you win. ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [October 2, 2013, 4:48pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/37 "2013-10-02T16:48:03Z")
> [@tonyfop](#): > > All I know is that if I put a dollar in, I have an infinitesimal chance of winning the jackpot, but an infinitesimal chance is infinitely greater than a zero chance. This, plus as has been stated elsewhere, there is entertainment value to be had. I’ll buy a lottery ticket for two Quick-Pick draws, cash value payout, numbers to be played in the next 10 games (5 weeks). Total cost $20. That amount is accounted for in my entertainment budget. I get 5 weeks of enjoyment for only 20 clams; cheap at the price. And every once in a while, I’ll hit something more than a three-number, $1 win. Entertainment gold! The key, as has also been pointed out, is that the lottery is NOT an investment (no matter what Jeff Foxworthy says about the lotto and commemorative plates :D). If you can afford to buy the ticket, it doesn’t hurt to play. If you can’t afford the ticket, it does. ---
**Author:** ![Irishman](https://avatars.discourse-cdn.com/v4/letter/i/b487fb/32.png) [@Irishman](https://boards.straightdope.com/u/Irishman)\ **Post date:** [October 2, 2013, 6:50pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/38 "2013-10-02T18:50:31Z")
“Afford to buy the ticket” is the key. If that money is coming out of your entertainment and junk food and recreation and “I’m gonna waste it anyway” money, then go for it if you enjoy the process. If that money is coming out of your money to pay the bills, eat, buy medicine, and general “keep you alive” fund, then you probably shouldn’t be playing. Of course, those are the ones most likely to play as an “investment”. ---
**Author:** ![qazwart](https://avatars.discourse-cdn.com/v4/letter/q/5fc32e/32.png) [@qazwart](https://boards.straightdope.com/u/qazwart)\ **Post date:** [October 3, 2013, 8:07pm UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/39 "2013-10-03T20:07:47Z")
There is a way of winning the lottery, and its called the [Pennsylvania Method](http://www.lottery-guy.com/lgblog/nick-perry-pennsylvania-lottery-scandal/). It has been shown to be a winning strategy. The only thing you must watch out for is getting caught. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [October 4, 2013, 12:18am UTC](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039/40 "2013-10-04T00:18:05Z")
Don’t forget [the winning Nonthaburi method](http://www.lotterypost.com/news/104195), similar to the Pennsylvania method in that the winning number, 113311, was repeated digits. (Despite that the numbers come from an official government lottery, in Thailand most lottery payouts are made by illegal operators. These operators were _not_ reimbursed in the Klom Bang Kruai scandal.) [Previous page](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039.md?page=1) [Next page](https://boards.straightdope.com/t/is-this-lottery-factoid-bogus/670039.md?page=3)