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Expected Return

Topic closed. 23 replies. Last post 13 years ago by LottoBuddy.

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New Jersey
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January 22, 2004
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Posted: February 19, 2004, 8:03 am - IP Logged

And you'd be smart to do it.

    LottoBuddy's avatar - tails

    Canada
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    February 15, 2004
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    Posted: February 19, 2004, 10:47 pm - IP Logged
    Quote: Originally posted by Jake649 on February 18, 2004


    The highest expected value for the Lotto 649 lottery occured on the Sept 30, 2000 draw. The expected value was 79%. The jackpot was $15 million and the sales were 28,649,988 tickets. The expected value is usually around 70% when the jackpot is $10 million

    The highest expected value for the Super 7 lottery occured just recently on Jan 30, 2004. The expected value was 70%. The jackpot was $30 million and the sales were 33,834,020 tickets.






    Thanks for the replies.  For the 6/49 Sept. 30 draw, the prizes given out totaled $23,839,799.3, so with sales of $28,649.987, the actual return was 83%.

    For Lotto Super 7, you get 3 plays for $2 so there were actually 101,522,391 "tickets" in play for January 30.  If we value the free plays as $2, the actual return for the $25 million bonus draw on January 23 was 84.6% ($46,517,297.30 / $54,964,354).  For Jan. 30, the potential return was 83% had the $30 million bonus jackpot been won ($56,317,199.5 / $67,681,594).

      Jake649's avatar - scene sunovermountains.jpg

      Canada
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      November 2, 2003
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      Posted: February 20, 2004, 7:36 am - IP Logged

      LottoBuddy,

      I am using the term expected value. It is not calculated by simply dividing the amount of money paid out by the number of tickets sold. The reason is that the money paid out is based upon someone winning the jackpot, this is not a given. Expected value calculations does not depend upon the jackpot being won, only the probability that it is won and by how many tickets. In performing expected value calculations, you need to calculate the probability of no jackpot winner, 1 winner, 2 winners, etc. These are the calculations that prob987 has been posting.

      I am sticking with my previous calculations.

      Good luck,
      Jake

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        New Jersey
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        Posted: February 21, 2004, 8:36 pm - IP Logged

        I have reviewed lottobuddy's paper posted earlier.  As I surmised in my conversation with Jake, the issue comes down to taxation.  An expectation values you may have seen from me or will see from me do not include taxes.


          China
          Member #3032
          December 16, 2003
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          Posted: February 22, 2004, 5:03 am - IP Logged

          Are you calculating for the government?I am surprised you guys are so fond of it..so whats the point?

            LottoBuddy's avatar - tails

            Canada
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            Posted: February 22, 2004, 4:06 pm - IP Logged
            Quote: Originally posted by goose on February 22, 2004


            Are you calculating for the government?I am surprised you guys are so fond of it..so whats the point?



            Looking for a fair bet is the best thing that gamblers like you can do.  The lotteries love players that stupidly buy tickets without even knowing the odds of winning, expected or potential value, and other important calculations.

            Some mathematically-inclined people are interested in the math of lotteries.  To each his own.  I have seen a lottery newsgroup where all members do is post their useless picks; anytime a number from their "magic" wheels is drawn, they think it is evidence that the lottery balls are talking to them

              LottoBuddy's avatar - tails

              Canada
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              Posted: February 22, 2004, 4:28 pm - IP Logged
              Quote: Originally posted by Jake649 on February 19, 2004


              One lottery that currently does have a positve expected value is the Mass Millions with a jackpot of $48.5 million. With very low sales, one can reasonably expect to not have to share the jackpot if won. If I lived there, I would only buy tickets for this lottery to the exclusion of all other lotteries until the jackpot is won.


              Can Jake649 or prob987 please post their numerical calculation of the expected value for the Mass Millions $49.2 million draw on Monday?  I have never seen a lottery where the jackpot hasn't been won for two years and each jackpot increase is so low.  Does anybody have a link for the sales figures?  We should form a syndicate and buy all 13,983,816 combinations!
                Jake649's avatar - scene sunovermountains.jpg

                Canada
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                Posted: February 22, 2004, 9:19 pm - IP Logged

                LottoBuddy,

                Here is my estimated expected value for the Mass Millions at the jackot level of $49.2 million.

                Assuming an after-tax cash value of $16 million and 1 million tickets sold, I estimate the expected value of the jackpot prize itself at $1.10. The value of the secondary prizes bring the value higher. I did not bother calculating them because the value is already well over 1 dollar.

                I would like to be part of a group to try to win the jackpot. You do not have to try to buy all the tickets to make it worthwhile. Even buying a couple of thousand tickets is a very "positive" gamble.

                Good luck,
                Jake

                  LottoBuddy's avatar - tails

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                  Posted: February 25, 2004, 2:35 am - IP Logged

                  Quote: Originally posted by Jake649 on February 22, 2004



                  Assuming an after-tax cash value of $16 million and 1 million tickets sold, I estimate the expected value of the jackpot prize itself at $1.10. The value of the secondary prizes bring the value higher. I did not bother calculating them because the value is already well over 1 dollar.





                  Since nobody (including the research paper) has given an actual example showing the calculations, I'll give it a shot:

                  ($2,657,320 / $13,983,816) + ($16,000,000 / 13,983,816) (P(0)/1 + P(1) /2 + P(2) /3)

                  = 0.19 + (1.144179814723 * 0.9650673333333)

                  = 0.19 + 1.10

                  = 1.29 expected value of Mass Millions

                  Please post any corrections.