Todd points out the amount of MM/PB jackpot which might be comparable to that of the current Euro Millions, and Think talks about those figures in Todd’s post recalculated as after-tax cash, suggesting that at that figure MM might be more attractive. I agree with each of both Todd and Think, to a certain extent. Honestly, I think that two are standing not so far from each other as they might look.
First of all, Think’s multiplier number (~.35=cash value ratio multiplied by (1-tax rate)) is very convenient and useful for the purpose of judging the attractiveness of jackpots, and what is being kept in my memory ever since I got used to be familiar with the unique feature of US jackpots, ANNUITY.
Next, as with some LP members, I do have an excel spreadsheet in which expected values of worldwide major jackpot games can be (re)calculated handily whenever I change some parameters like the amount of jackpot, tax rate if applicable, per-ticket price, all the odds, and so on. While reading Todd's post regarding the amount of MM/PB jackpot comparable to this Friday’s EM at $100+M, I tried to change some parameters. After a few trials, when I set the ticket price at $2.50 and varied the amount MM/PB jackpots, those numbers in my spreadsheet were very close to what Todd indicated. Specifically, at $2.50 each, MM needs $373M and PB $365M so they can have expected value of .47, which is comparable to the Euro Millions drawing on January 6.
If one can buy MM ticket for $1 at a local convenience store, the scenario would be much different. In that case, my spreadsheet indicates $111M MM annuity jackpot and $105M PB annuity, at which MM, PB, and EM all have comparable expected value per dollar spent of around .47>
<Assumptions in the spreadsheet calculation>
- MM/PB ticket=$2.50, EM ticket=$5.00
- only 25% federal tax is applicable in MM prizes over $600 while no tax at all in EM prizes.
- In this coming Friday night drawing, EM pays $500,000 for the second, and $100,000 for the third, which I think would be reasonable. Lower-tier prize amounts were extrapolated based on a few previous drawings. Please note that all EM prizes are pari-mutuel.
- EM jackpot of $104M, just a few more M than USA mega. Considering the past pattern of UK's conservative EM jackpot estimates, I bet confidently that this Friday's EM jackpot would exceed at least $105M. In fact, most other countries including France, the host country, advertise the estimated jackpot to be 88 million euros, which is directly converted into $106M using XE.com currency converter. <http://www.xe.com/ucc/> <http://www.fdjeux.com/jeux/euromillions/euromillions_s_tirage.php>
In short, I think that, to understand those numbers in Todd’s post in this thread, one needs to take the possibly implicit MM/PB ticket-price, which I estimate is likely to be around $2.5 each, into account. On the other hand, to understand exactly Think’s numbers within the context of the issue one needs to take into consideration the difference in the odds between MM/PB and EM, and probably the difference in ticket prices available between in-state and out-of-state players as well, into account. Then, I think, a gap between what Todd and Think talked about would disappear or diminish. That’s why I am saying that the two posters, Todd and Think, are standing on the issue not so far from each other.
Good luck to any LP member that plays Euro Millions and/or Mega Millions this Friday night!