My new best friend

[cjppjc]

Calif. man with 3 jobs wins $39 million lottery

49-year-old plans to take wife to Hawaii — and hire financial adviser

Opps. Do you think he'll be able to find one:cool:




updated 2 hours, 40 minutes ago
SANTA CRUZ, Calif. - A man who works three jobs to support his family — including one as a limousine driver — has won a $39 million jackpot in California's SuperLotto Plus.

[Ghent12]

Re: My new best friend

Good for him, but it's awful that his story will be used to further reinforce the completely voluntary Stupid Person Tax.

[cjppjc]

Re: My new best friend

Good for him, but it's awful that his story will be used to further reinforce the completely voluntary Stupid Person Tax.

Hey I resemble that remark.:mad:

[ASH]

Re: My new best friend

Good for him, but it's awful that his story will be used to further reinforce the completely voluntary Stupid Person Tax.

Lotteries aren't only a stupid person tax. They are also a diversion for the mathematically-minded contrarian. It turns out that sometimes buying a lottery ticket is reasonable.

To first order, the expected value of a lottery ticket is one quarter of the jackpot times the chance of winning (this neglects the marginal value associated with the chance you might win prizes smaller than the jackpot, but also the chance that someone else will hold a winning ticket). The factor of 1/4 accounts for the fact that you will want to take the 50% up front payout option, and assumes that state and federal income taxes will total 50%, such that your actual take-home will be about 1/4 of what you "win". In my home state of Oregon, the chance of hitting the jackpot on the Megabucks state lottery is 1:6,135,756. Also, you can purchase 2 Megabucks drawings for $1. So, to first order, the "break even" point occurs when the jackpot exceeds about $12M. I have seen several instances in which this has occurred, since the jackpot increases over multiple drawings if no one has the winning ticket. Thus, someone who only plays the lottery when the jackpot exceeds $12M isn't being all that unreasonable. To be a little more rigorous, one should probably try to estimate how many other people are buying tickets based upon the increase in the jackpot from the last drawing, so that a probability can be assigned to the outcome in which you have to share the jackpot; I haven't bothered doing so.

[Ghent12]

Re: My new best friend

Lotteries aren't only a stupid person tax. They are also a diversion for the mathematically-minded contrarian. It turns out that sometimes buying a lottery ticket is reasonable.

To first order, the expected value of a lottery ticket is one quarter of the jackpot times the chance of winning (this neglects the marginal value associated with the chance you might win prizes smaller than the jackpot, but also the chance that someone else will hold a winning ticket). The factor of 1/4 accounts for the fact that you will want to take the 50% up front payout option, and assumes that state and federal income taxes will total 50%, such that your actual take-home will be about 1/4 of what you "win". In my home state of Oregon, the chance of hitting the jackpot on the Megabucks state lottery is 1:6,135,756. Also, you can purchase 2 Megabucks drawings for $1. So, to first order, the "break even" point occurs when the jackpot exceeds about $12M. I have seen several instances in which this has occurred, since the jackpot increases over multiple drawings if no one has the winning ticket. Thus, someone who only plays the lottery when the jackpot exceeds $12M isn't being all that unreasonable. To be a little more rigorous, one should probably try to estimate how many other people are buying tickets based upon the increase in the jackpot from the last drawing, so that a probability can be assigned to the outcome in which you have to share the jackpot; I haven't bothered doing so.

I will grant you that, but your analysis is for your microcosm. The house always wins, and while some people can justify to themselves that they are helping fund public schools, the reality is usually that you have a greater chance of dying on the way to buying the tickets than of seeing a return on your investment.

[ASH]

Re: My new best friend

I will grant you that, but your analysis is for your microcosm. The house always wins, and while some people can justify to themselves that they are helping fund public schools, the reality is usually that you have a greater chance of dying on the way to buying the tickets than of seeing a return on your investment.

Yeah... even if the expectation value of the lottery ticket is larger than its cost, no one has the resources to play the game enough times to come out on top. (Or, rather, those who do have resources on that scale generally have better uses for their money.) I'm just entertained by the fact that a condition can exist in which the odds are technically in the lottery-player's favor.

[Moe_Gamble]

Re: My new best friend

...no one has the resources to play the game enough times to come out on top. (Or, rather, those who do have resources on that scale generally have better uses for their money.) I'm just entertained by the fact that a condition can exist in which the odds are technically in the lottery-player's favor.

There are professional gambling syndicates playing lotteries all over the world. They buy enormous numbers of tickets. As you mentioned, it's an excellent play under the right conditions.

[metalman]

Re: My new best friend

I will grant you that, but your analysis is for your microcosm. The house always wins, and while some people can justify to themselves that they are helping fund public schools, the reality is usually that you have a greater chance of dying on the way to buying the tickets than of seeing a return on your investment.

iTulip.com - Glossary

state lottery : n. a regressive tax imposed by the state on those of its citizens it has failed to provide a basic education in the laws of probability. Usage: "You don't see many Harvard graduates waiting in line to buy tickets for a state lottery." Related quotation: "I never play the lottery. I figure I have about the same chance of winning whether I play or not." - Fran Liebowitz

Perhaps some focus ought to be brought to bear on the lottery. In some ways, the lottery can be described as the most insidious form of gambling. Two features of the lottery justify that description. First, the regressivity of the lottery as a tax is such an established fact that even the most clever economists hired by the lottery proponents can not convincingly refute it.
Second, since the state, not a private sector entity, operates the lottery with the knowledge of the toll it takes on the economically disadvantaged, it is a case of the state acting as an economic predator of its weakest citizens. The studies that demonstrate the inefficiency and counterproductive nature of the lottery are numerous.

Thomas Jones and John Amalfitano in their book America's Gamble highlighted a study of the equity of state lotteries that was conducted by the Sociology Department of the University of Connecticut. "The report concluded that the Connecticut lottery primarily attracts poor, unemployed, and less educated players. The study recommended the discontinuance of the lottery, claiming that it is a regressive means of raising state revenue." (John Amalfitano and Thomas Jones, America's Gamble: Public School Finance and State Lotteries, Technomic Publishing Co., Inc., Lancaster, 1994, p. 55.)

Two other important findings by Jones and Amalfitano have to do with the inefficiency of the lottery and the poor revenue source that it represents. They stated, "As a fund-raising device, the state lottery is also criticized as being deplorably inefficient.... Inefficiency in taxation suggests excess costs to the taxpayer and taxing jurisdiction." (Amalfitano and Jones, p. 61.) They discovered that on average lottery states spend 40 cents to raise one dollar through the lottery. "Viewed as a tax, lotteries are incredibly costly to administer." (Amalfitano and Jones, p. 62.)

Money for gambling is usually diverted from people's discretionary expenditures. Not only are dollars diverted from other products and services, but governments often lose sales taxes which would have been spent on those products and services. (Goodman, Legalized Gambling, p. 51.)

casinos are even worse... cost more than 4x the tax revenue they generate...