[JohnGalt2341]

I don't play the lottery and I doubt that I ever will but when it gets to 500 Million it intrigues me because if your true odds of winning are 175 Million to 1 it seems like a +EV play.

So here's my question... if Bill Gates(or anyone else that could afford it) purchased 175 Million tickets would this be a +EV play? Or would the chances of others also winning be too great?

[TomG]

calculate based upon the lump sum, after tax payout

[AlwaysDrawing]

my guess is it's pretty close to 0 EV when you consider how many tickets will be bought, and that you only get the cash option of $360 million. Taxes are the real problem, and I think that cuts your edge down dramatically.

The Kelly stake is 0, but it's probably worth throwing away a dollar in this drawing.

[LT Profits]

I don't do lotto either, but I would guess that a jackpot like this would mean humongous sales and that would increase the chances of multiple winners, and even only 2 winners would kill the +EV on post-tax lump sum.

[jrs362]

It's basically impossible to buy the required number of tickets in the time frame before a draw to ensure that you've covered all conbinations.

There are 175,711,536 possible combinations for Mega Millions.

From Friday night - Tuesday night (the longer of the 2 "between draw periods"), there are approximately 96 hours between draws that you can purchase tickets for the Tuesday night draw. A person would have to print 1,830,328.5 tickets per hour during that time in order to cover all combinations.

That comes out to 30505.475 tickets per minute. 508.4245833333333 tickets per second.

I work for a lottery vendor, and as far as I know, there is not a lottery terminal on the market that will print a ticket per second, so you would likely need to tie up several thousand lottery terminals and store employees for 4 consecutive days in order to achieve this. You would also need to allow time for the employee to manually input each combination to ensure tha you're not playing duplicate combinations as well as changing the roll of paper in the machine once it's been used. I suppose you could just keep playing quick picks, but you'll likely print duplicate tickets at some point.

Essentially it's not a matter of being able to afford all of the tickets, but rather having the logistics to be able to find enough people to work with you and enough stores willing to let you take over their machine(s) for those 96 hours.

[Mikail]

absolutely -even

[dodger33]

calculate based upon the lump sum, after tax payout

360 MIL x .55% (assuming 35% top federal bracket and 10% top CA bracket) =198 mil

[AlwaysDrawing]

360 MIL x .55% (assuming 35% top federal bracket and 10% top CA bracket) =198 mil

No state tax on lottery in CA.

[MonkeyF0cker]

calculate based upon the lump sum, after tax payout

You also have a birthday paradox issue (i.e. the chance of others having the same winning numbers)

Depends on (a projection of) how many other tickets are sold as well.

[mebaran]

As the jackpot gets higher, more tickets are bought, thereby increasing the odds of a split jackpot. It may be plus EV for an outright win, but any split turns it into a -EV event (I don't know the math exactly, but if you figure around 400 million tickets being bought before tomorrow night, that means there should be between 2-3 winning tickets).

Also, what TomG said.

At any rate, if you won, you could dump it all in US treasuries and live off of basically risk-free interest (probably just barely outpacing inflation, but who cares about that at that point).

[wrongturn]

If you include the gas money, time waiting in the line, and extra items you overpaid in the store while you are at it, it becomes -ev quickly.

[TomG]

anyway ev doesn't really apply since we only need to win this thing once and we're set for life (not repeated trials)

[rm18]

you could buy all the combos and then bet 10 billion on yes a winner at 5 dimes easy money

[rm18]

It was not +EV to most, but if you are planning on filing pro gambler and could write off the losses it was actually

[mathdotcom]

All that matters is relative EV.

The EV of staying home in your underwear is greater than any EV there could exist from the lottery.

[matekus]

FYI - http://www.mathcs.emory.edu/~skip/home/Lottery.html

matekus

[wrongturn]

anyway ev doesn't really apply since we only need to win this thing once and we're set for life (not repeated trials)

Then you can say ev does not apply to any big lottery, including the likes of $100m price for 200m combinations. Before one can be set for life, he has to keep buying until hit, which is......... well forget it. Life is short, right?

[HauntingTheHoly]

If you include the gas money, time waiting in the line, and extra items you overpaid in the store while you are at it, it becomes -ev quickly.

Responding with a smiley is too short now. I see. Well THIS post is certainly more productive...

[yisman]

you could buy all the combos and then bet 10 billion on yes a winner at 5 dimes easy money

lol, I wonder what their limits are for that bet? $10? Either way, the yes was free money. I just wish I had maxed the yes when it was at like -500.

[yisman]

sorry, I meant $100. Limits can't be much higher.

[peacebyinches]

an often forgotten part of actually buying EVERY combination is that you not only would be guaranteed to win a part of the jackpot, but you would also have 45 or 46 tickets with $250,000 prizes, and like a jillion with smaller prizes (for getting like 3 or 4 numbers right). I kind of am interested how much money you are guaranteed to get from all of the tickets that win except for the jackpot.

I'm sure it would still be very -EV but still, interesting to think about

[MadTiger]

[delurk]

US Federal rate for lottery jackpots = 25%

For total payout after covering all combinations, we could look at the payout table, and set up some combinatorics equations for each case. 175,711,536 in the denominator, 59 things taken 5 at a time, etc.

[lurk]

[Jaug]

Three winners this time right?

[rm18]

sorry, I meant $100. Limits can't be much higher.

limit was $250 but unlimited rebets, you can bet a million dollars on a 5 dimes line theoretically if you trust them with the money

[rm18]

an often forgotten part of actually buying EVERY combination is that you not only would be guaranteed to win a part of the jackpot, but you would also have 45 or 46 tickets with $250,000 prizes, and like a jillion with smaller prizes (for getting like 3 or 4 numbers right). I kind of am interested how much money you are guaranteed to get from all of the tickets that win except for the jackpot.

I'm sure it would still be very -EV but still, interesting to think about

I think it is like 25% return on not jackpot ticks, like I said it was +EV if you filed pro gambler and could write them off, but would of been a better deal if there were not so many tiks sold.

[a4u2fear]

he could claim the -174,999,999 million dollar loss on his taxes