With the Mega Millions approaching a record jackpot, many of the media outlets are running lottery stories. This one really cracked me up:
In short, here is the “expert” advice:
Pick your own numbers. Don’t leave it up to the machine. Lustig advises against playing Quick Picks, the phrase describing the number the computer picks for you when you don’t use your own.
Do your homework. Go online and make sure the set or sets of numbers you play have never come up before.
Stick with your strategy. You have to learn what number to play and how often to play. Commit to your numbers and stick to your strategy.
Avoid lottery fever. When jackpots get this high, Lustig says, people tend to get lottery fever and spend a lot more than they normally would or can afford. Don’t go crazy; the odds are still the same no matter how much you spend.
Wow, 0 for 4. Okay, I’ll give him a half point for the “avoid lottery fever” comment. But still. And millions will be using his advice. There must be a way to make money off this.
But the odds aren’t the same no matter how much you spend. If you buy 2 tickets instead of 1, your chances of winning do double (assuming that you don’t play the exact same numbers).
Well, this guy does have the advantage of being a multiple winner. His first win was in 1992 for $10,000, and has apparently won the grand prize 7 times, for over $1Million total in wins. That shows some track record. His biggest win is $842,000 in 2002.
Now it could just be an incredible lucky streak, or it could be the fact that he plays the lottery like it is a full time job, so it’s just a matter of percentages. But consider:
From 1992 to 2012 is 20 years.
He has won over $1,000,000 total in that time.
Assuming conservative number of $1M, for 20 years, that is $50,000 per year.
He would have had to spend over $50,000 a year on lottery tickets for this to be a losing proposition. If he has spent less than that, he is ahead.
$50,000 a year is $961.54 a week. That is $137.36 a day.
So, if he is spending buying 100 tickets a day, that means he spent $728,000 in 20 years to win $1,000,000, or $272,000 in profit.
Hmmm, $272,000 total profit (not counting taxes) for 20 years of work. That’s like a salary of $13,600. Before taxes.
Doesn’t seem like that lucrative a day job.
Nevertheless, he’s selling a book that outlines his strategy. Then theres this advice:
The first is potentially useful information if you wish to play the lottery. The second and third are nothing special, but the third is sensible.
With regards to the strategy in the OP:
There’s no advantage to not playing Quick Picks, but there’s no advantage to playing Quick Picks either. I don’t know how likely quick picks are to duplicate, so I can’t assess the odds for multiple winners on quick picks.
There’s no limitation that says that previously winning combinations can’t win again. It does seem intuitive that a previously winning number won’t win again, but if the numbers are truly random, there’s nothing that precludes it. Still, it won’t hurt.
Strategy would seem to be worthless, but as a 7 time winner, maybe he is on to something. He has a 40 page book on his strategy. I’m not wanting to read it, but someone might.
He is correct that the odds for each number combination don’t change, but the payoff advantage if you win does go up, so the balance on risk vs reward shifts. But it’s still sensible not to pay more than you can currently afford, regardless of the potential payoff, as the odds don’t change. You do minisculely improve your personal odds with each ticket you purchase.
Sure is – here, take my idea and run with it (you can give me a taste once you hit a million in sales):
Spend a few weeks entering every winning lottery number ever into a database. Crunch those numbers until you have two lists: Numbers that hit most often (“hot” numbers) and numbers that hit the least often (“due” numbers). Sell lists of the top 50 numbers on both lists. Cha-ching!
Actually, technically speaking there is some basis for #2: while of course a set of numbers that have won in the past is just as likely to appear as any other set of numbers, there are people out there who specifically pick numbers that have won before. So if you did win, you’d be splitting the jackpot with more people. Same logic goes for why you don’t pick 1-2-3-4-5.
I always heard you should do the opposite of #1. That is, DO NOT pick your own numbers. Reason being when people pick their own numbers they tend to choose birthdays (numbers between 1 & 31). So you have an overabundance of tickets sold with these numbers.
While these tickets do have the exact same odds as being the winning ticket of a computer chosen one, they also have the unfortunate increased odds of being a duplicate meaning you would have to share your winnings with somone else.
To increase your odds of being the sole winner you should avoid numbers below 32.
As Jackknifed Juggernaut points out, the one time he actually mentions odds he gets it utterly wrong. Your odds of winning the jackpot rise proportionally to your investment. Sure, in real terms there’s not a huge difference between 1 in 13,000,000 and 2 in 13,000,000 (or whatever the odds of your lottery are), but if you buy a second ticket you are twice as likely to win.
I also agree with Hampshire - it’s better to use the “quick pick” or “lucky dip” function. It doesn’t improve your odds of winning the jackpot, but it does generally mean that, if you do win, you are slightly less likely to be sharing it with other people.
I don’t think that is what he’s saying. He’s saying the odds of winning don’t improve just because the jackpot is larger. And that is correct.
Of course your odds of winning improve if you buy more tickets. But he says that as well.
Where I think he’s wrong is that the risk/reward tradeoff shifts as the jackpot increases. It’s worth risking slightly more when the payoff result goes up substantially.
Say the deal is you in a room full of people betting on which card will be pulled from a deck. Standard playing deck, well shuffled, totally random. The ticket price is 1 quarter, the payoff is 1 dollar. If you buy four tickets, the best you can do is break even, and if you buy 5 or more tickets, you will be losing money. So if you buy 1 ticket, you have a 1:52 chance of winning. You can buy 3 tickets for a 3/52 chance of winning, and if you win you are ahead by 25 cents.
Now increase just the jackpot amount to 25 dollars. Ticket price is still 1 quarter each. Now if you spend $13, you are guaranteed to win the jackpot, for a net gain of $12.
So as the jackpot increases, the value of buying more tickets goes up.
Of course those numbers only work if you are the only one playing. If the room has 10 people and each of them plays the same strategy, you split the take evenly, thats on $2.50 per person, so you net lose $10.50.
But if the jackpot is high enough vs the number of people playing, then the value of return on each ticket goes up.
What if the jackpot is $2000, with ten people playing? Everyone buys 1 ticket of each type, so they spend $13 each, but win $200 each. Net gain for each of $187.
Of course no sane lottery is only going to have 1:52 odds of winning, but the implications are the same, it’s just the margininal changes are much smaller.
Awesome idea. If I wasn’t so damn ethical, I’d consider doing this. Then again, if the government and casinos can rip off stupid people, why shouldn’t I?
And the obvious realized benefit, of course, being that it saves time.
I’ve always wanted to sell shares in “the lottery fund”. Functionally an office lottery pool with a ton of players to increase your chances! And me taking a management fee. But I’m too ethical, and it’s probably illegal.
