Re: Lotto odds

[edgar@spectrx.sbay.org (Edgar W. Swank)]

My thanks to Tim for his comments on my post:

    > Tim May said,
    >
    >     ...As for lotto, simple calculations tell anyone that the best way
    >     to win is not to play.  The return _at best_ is 30 or 40 cents on
    >     the dollar, with the rest going to all the various programs the
    >     lotto is supposed to support.  The more you play, the more you
    >     lose.
    >
    > Actually, if memory serves, the CA Lotto claims to return 50% of
    > income in prizes with the remainder divided between schools and

    Maybe, but the state has a wonderful scam of paying off a "5 million
    dollar jackpot" over 20 years; the true value (what the same deal
    would cost you to buy as an annuity) is less than $5 M, possibly much
    less. If private outfits did this, they'd be jailed.

Yes, but the return is still 50%.

    > "administration."  Better than 30-40, but still worse than odds on any
    > casino game or even the "numbers racket" run by organized crime.
                  ^^^^^^^
    "Or even"? The numbers games almost always have much better odds than
    the State pays...that's one reason for their popularity (another is
    tax avoidance).

I've never played the numbers game myself, but I've heard that the
payoff is 600-to-1 on a 1000-to-1 bet.  That's a 60% payout, compared
to the lottery's 50%, hardly "much" better.  Compare to casino games;
Keno, 80%; Slots, 90%+; Roulette, 95%; Craps, 99%.

    > Calculation of "x" is not "simple", since you also have to figure in
    > the 20-year (with no interest) payout of large prizes.

    Oh, I see you mentioned this scam. (Calculation should still be
    simple, as any spreadsheet can handle discounted present values and
    the like.)

Not simple for me.  If it's simple for you (or anyone reading this) I
would be interested in the results of the calculation.  Recall "x" is
either the number of times the jackpot must be passed or the nominal
value of the grand prize for which there is a positive return for the
player (assume no prize split).  You might work this out for time
values of money of 5-10-15% per annum.

    I've never played, and never plan to. Money down the drain.

I rarely play (have never won).  My wife (an ethnic Chinese) plays
weekly in a "pool" where she works.  She plays on her own when she
sees a good "omen", like finding dog shit in front of her house(!?).

--
edgar@spectrx.sbay.org (Edgar W. Swank)
SPECTROX SYSTEMS +1.408.252.1005  Cupertino, Ca