Half Billion Dollar Lottery

[The Mad Monk]

...yeah, I bought a ticket.

[Tuberski]

Me too. It's a dollar. 1 in 176,000,000 chance to win.

So does that mean there are 176 million number combinations?

ACK!

[pchang]

Yes. Expected rate of return is actually slightly > 1.

[Aeson]

That's why I bought a half billion tickets!

[Lorizael]

A discussion I'm having with a friend on facebook:

Lori's Friend: So if there are 176 million possible combinations of megamillions numbers, and it costs $1 per combination, and the winning amount is ~500 million, why not just buy $176 million worth of tickets and walk away with $300mill?

Lori: Who's going to fill out the 176 million tickets? If it takes 1 minute to fill out 1 ticket, you'd be filling out tickets for ~335 years nonstop. Even if I'm overestimating the amount of time required to fill out a ticket by an order of magnitude, that's still ~33 years of filling out tickets while literally performing no other activities.

Given that there's only a week or so between drawings, however, your only possibility is to hire workers to fill out the tickets for you. Going with the lower estimate, that's approximately 300,000 man hours, which you'd have to split up amongst enough workers so that you don't have to pay overtime. Minimum wage is $7.25/hr, so you have to spend an additional $2 million in wages to your workers. Since you're already borrowing $176 million, this is eminently doable.

However, you better hope none of your 7500 workers attempt to claim rights to the winnings.

Lori's Friend: So now I only need some collateral. Too bad your soul I got in middle school has depreciated to the point of being a white elephant.

(I sold my soul to this friend for a twinkie in middle school. Well worth it.)

[Aeson]

Of course the risk is multiple winners and splitting the jackpot. If you borrow $178 million and split it 3 or more ways you're ****ed.

[rah]

And then get taxed on it. Ouch

[Aeson]

Yah, doesn't leave much room for profit even in the best case. (Then there's management/hiring costs, transportation costs, liabilities... probably starting from the hole in the best case.)

[PLATO]

A buck for a chance at $390 million cash payout? Yeah...I'm in.

[rah]

Yeah, I usually consider lotteries just a tax on the poor and avoid them, but when the pot get this high I usually cave and play a few bucks.

[The Mad Monk]

Of course the risk is multiple winners and splitting the jackpot. If you borrow $178 million and split it 3 or more ways you're ****ed.

Assume random distribution: the odds of another person choosing that number is also 1 in 176 million; the number of tickets bought will change that, of course, but it's still 1 in 176 million for each ticket. It doesn't go far before the impact on rate of return is negligable.

[rah]

Well let's think about it for a moment. The jackpot is 180 million higher than the last drawing. 50% of ticked sales generally go against the pay out. Assume another 50% of the take to pay off non-jackpots and you'd need 180m X 4 to generate the extra 180 mil in the jackpot. So that's 720 million tickets expected to be sold. The odds of multiple winners isn't that unlikely.

[The Mad Monk]

I think you're forgeting that most of that pot is already paid for by all the previous non-winning pots. One site is projecting $476M, but given that that is considerably larger than our actual population, I think even that is too much.

[Dinner]

I spent exactly $1 on the $360,000,000 lotto earlier this week but there were no winners so now it's up to something like $460mm. I guess I can spring for one more $1 quick pick.

[rah]

I think you're forgeting that most of that pot is already paid for by all the previous non-winning pots. One site is projecting $476M, but given that that is considerably larger than our actual population, I think even that is too much.

No i'm not forgetting that. I checked out the official site and they're projecting a 540m or so payout which is where I got the 180m different from. The payout for the last drawing was about 360m.