Over the years, I’ve written about the lottery many times. Usually when it reaches a new record, the media clings on to it and the hype just snowballs.
I’ve pointed out how you aren’t likely to get as much as you think and we wrongly believe we change the odds of winning.
And let’s not forget winning the Powerball won’t solve your problems and it won’t even make you happy.
Despite all that I wrote the follow article the last time the lottery reached new highs: We Bought Lottery Tickets… Here’s Why.
So why am I writing about the lottery today? To the best of my knowledge it isn’t near some kind of high. I don’t follow them, but I haven’t heard any particular hype.
This tells me it might be the best time to rationally discuss the lottery.
There’s one other reason why I wanted to write about it today. Last night, I happened across this excellent Powerball Simulator on the LA Times.
I started out simulating the results of $1000, then putting another $5000, then $10,000, then $20,000, then $20,000, and finally $100,000. If you are going to test this prepare to go make lunch while it simulates the last $100,000.
So what happens when you put $156,000 in the lottery? I knew the odds of winning where incredible, but it was easy to think, “Hey, I’ll just throw more virtual money at it until the simulator gets me the big win.”
It seems reasonable enough, right? I can’t change the odds of each individual play, so that’s the only thing I can do.
So I spent $156,000 to win $15,083. I lost 140,917. So it appears to be set-up mathematically so that people will lose 90% of the money they put in.
Now, the money generally is “intended” to go to good use. I say “intended”, because this ABC News article I dug up, appeared to called it into question.
As a final thought, you may have noticed that I put “debate” in quotes in the title. There’s little mathematical debate about the lottery.
However, perhaps if people play with the simulator as I did, they’ll feel differently about what they do with their real money. It’s worth a shot, right?
I’ve been running the simulator, and have had similar results. Overall, this is what I can conclude before I let it run forever and my eyes roll into the back of my head.
Money Spent: $83,468
Money Won: $7,274
Return on $: $.09 (9 cents on the dollar = less than LM)
Avg. Ticket Price: $1.83
Odds of 1 red: 1-55…I hit 1-58 (Pretty close)
Odds of 1 red 1 other: 1-111…I hit 1-113 (Pretty close again)
Odds of 1 red 2 other: 1-706…I hit 1-535 (KILLED IT!)
Odds of 3 other: 1-360…I hit 1-248 (KILLED IT!)
Odds of 1 red 4 other: 1-12,245…I hit 1-5,962 (WOO LOOK OUT!)
Odds of 4 other: 1-19,088…I hit 1-8,347 (OMG ODDS GOT NOTHIN ON ME!)
Odds of 4 other 1 red: 1-648,976…I hit 0 (Wah wah wahhh)
Odds of 5 other: 1-5,153,633…I hit 0 (Wah wah wahhh)
Odds of Hitting all 6: 1-175,223,510…I hit 0 (Wah wah wahhh)
Overall results…I broke most of the odds considering the amount of play I did. I managed to lose 91% of my investment. Lesson here? The winning ticket is RIGHT AROUND THE CORNER! (Sarcasm implied) This is not a great investment opportunity.
I got bored once in vegas waiting for a flight and ran a monte carlo simulation (ie. programmed) the odds of Caribbean stud. Always take the $1 play :)