Lotteries are worse than you think

Admin

Administrator
Moderator
Messages
3,793
#1
While around 50% is typically given back to the players in terms of winnings a lot of that is used for obscenely large jackpots resulting in other winnings being very small relative to your chance of hitting it.
1693513398061.png

https://www.cuandomevaatocar.com/en/powerball/simulator/

With the mega millions lottery you can get 5 of 6 number correct but only win 10000$ even though you the probability of getting that is just 1 / 931001

1693513953291.png

Here only around 25% of the prize-money is spent on the non-jackpot prices resulting in the typical player getting only 7% to 15% of their money back.
mega-millions-fail.png

Here i got less than 10% back but earlier i got 'lucky' and got over 10% back:

lottery.png


https://lottosimulation.com/us/mega-millions

There is diminishing utility of money so winning 1 billion $ does not have 10 times the utility of willing 100 million $.
 

Attachments

Admin

Administrator
Moderator
Messages
3,793
#2
Lottery winners often go broke
It's very common for lottery winners to later to broke due to bad financial decisions. People are not just poor due to bad luck, often it's due to not being good at managing money.

https://moneymarshmallow.com/why-do-lottery-winners-go-broke/

This could of course be improved by the government providing lottery winners with financial advice to help them actually live a financially well off life but that isn't the focus, they just want the PR from having some guy win like 300 million $ (even if they later lose everything).
 

Admin

Administrator
Moderator
Messages
3,793
#3
False hope
One big issue with lotteries is that it provides false hope for people resulting in them playing the lottery instead of focusing on things actually likely to improve their situation. You are much better off not having that false hope in your head. Try to get to real hope for improvement instead if you are not already there.

 

Admin

Administrator
Moderator
Messages
3,793
#4
How i would design a lottery for a government
The goal is to get many people to play giving them false hope rather than extracting as much money as possible. For that reason most of the money would go back to the players. Tickets would be bought digitally with drawings being daily.

People would pick 6 numbers between 1 and 80 for each ticket (or have them be automatically generated).

6 numbers correct: 100 000 000 $
5 numbers correct: 500 000 $
4 numbers correct: 2 500 $
3 numbers correct: 50 $
2 numbers correct: 2 $

Each ticket would cost 2$ with the average winning per ticket being 1.7392

No more than 10000 tickets would be allowed with the same number combination.

The same person would not be allowed to buy more than one ticket with a given combination unless it's gifted to someone else.

I would make sure high profile people played in the lottery to get the masses on board.
 

Admin

Administrator
Moderator
Messages
3,793
#5
Better prize-structure for powerball or mega millions
Here people pick 5 ordinary numbers between 1 and 70 and a special number between 1 and 25

5+1: 100 000 000
5+0: 2 000 000
4+1: 100 000
4+0: 3 000
3+1: 1 000
3+0: 50
2+1: 50
1+1: 6
0+1: 2

Here the average win per ticket would be 1.018751969 while the ticket costs 2$ making it a giant ripoff.
 

Admin

Administrator
Moderator
Messages
3,793
#6
A better 5+1 format
Here people pick 5 ordinary numbers between 1 and 75 and a special number between 1 and 25

5+1: 100 000 000
5+0: 5 000 000
4+1: 250 000
4+0: 10 000
3+1: 2 500
3+0: 100
2+1: 100
1+1: 10
0+1: 2

Here the average win per ticket is 1.30844717
 

Admin

Administrator
Moderator
Messages
3,793
#7
Lottery inspired by razzle dazzle
There is an infamous carnival scam called "razzle dazzle" where the scammer initially miscounts for the benefit of the player giving them false hope.


So i was thinking of making this into a legitimate lottery.

People will select 8 of 72 balls and each ball will land on a spot worth 0 to 3 points

36 spots worth 0 points
15 spots worth 1 point
12 spots worth 2 points
9 spots worth 3 points

Each ticket costs 4$
Code:
score         prize                                 $ per ticket
24     500 000 000            9    4 500 000 000    0.4419305256    0.4419305256
23      10 000 000          432    4 320 000 000    0.4242533046    0.8661838302
22       1 000 000        6 084    6 084 000 000    0.5974900706    1.4636739008
21         100 000       44 136    4 413 600 000    0.4334454595    1.8971193603
20          12 000      232 218    2 786 616 000    0.2736645941    2.1707839544
19           2 560      985 824    2 523 709 440    0.2478453865    2.4186293409
18             640    3 447 234    2 206 229 760    0.2166667283    2.6352960692
17             160   12 897 348    2 063 575 680    0.2026571300    2.8379531992
16              40   26 074 467    1 042 978 680    0.1024275814    2.9403807806
15              12   65 512 656      786 151 872    0.0772054467    3.0175862272
14               4  131 850 909      527 403 636    0.0517946147    3.0693808419
One interesting option is to allow people to pick more than 8 numbers. The first extra number would then cost 40$ and the second would cost 180$, then you would get a ticket for every possible 8-number combination. Main issue with that is it potentially confusing some people, especially past 9 numbers. People who play lotteries tend to not be particularly smart.
 

Admin

Administrator
Moderator
Messages
3,793
#8
Lottery winnings in the US are taxed
This is ridiculous since states already run it and already take out nearly half to prop up their state budgets, then the federal government and the state it was won in takes even more, it's basically a scam.

https://www.nerdwallet.com/article/taxes/lottery-tax-calculator

They also don't let you get the full value of the jackpot if you take it as a lump sum, but if you do not take the lump sum inflation will eat up the winnings also leaving you with a lot less in practice than the nominal jackpot amount.

 
Top