Is Playing the Lottery Worth the Risk?

[DaveC426913]

Maybe, though money and happiness are NOT mutually exclusive terms, IMO.

Agreed.

Also, you can be happy and poor (or doing fine) and still place a bet on getting rich.

Buying lottery tickets does not require you being a miserable money-grubber.

 

[alt]

I think it's more complicated than that. Sure, it's easy to say be smart about it. But when it comes to relationships, actually being smart about it often gets trumped by primal needs. That is, almost impossible to resist even when you know the decision may not be a smart one.

Edit = posts crossed.

 

[alt]

I think it's more complicated than that. Sure, it's easy to say be smart about it. But when it comes to relationships, actually being smart about it often gets trumped by primal needs. That is, almost impossible to resist even when you know the decision may not be a smart one.

Edit: a concrete example: Take Mel, 54, hot-babe (relatively so), 40 showin' interest in him (pretty sure just cus' of the money), that's really, really hard for a man to resist especially if she's seducing him. Majority of men couldn't resist that. Now looks what happens. I'm sure Mel wishes he never met her.

I understand what you are saying.

If you (I'm speaking generically) are poor and come into a couple of mil, unless you were very very careful, you would likey have problems. Still, some would say those problems are sufferable with a couple of mil .. :-)

I think though, that this discussion jumped from lottery, to earning big money.

People who work for, and earn big money are of course, inured to it's pitfalls .. mostly !

 

[lisab]

I got an A in probability theory last semester, yet I occasionally play the lottery. I end up spending approximately 20 dollars per year on lottery tickets for the "big jackpot" games. In my budget book, I put that down in the "entertainment" category. It satisfies an emotional itch, it has nothing to do with being bad at math.

I spend a lot more money on Keno at bars, around 200 per year. But once again, this isn't due to poor math skills. I understand that for every dollar I spend, my expected value is 67 cents. I do it for the social aspect and to satisfy that emotional itch.

There are some people who play the lottery because they believe in "magical thinking." They believe that because they had a dream about a lottery number, that number will hit and they need to play it. Or if they saw a specific number on two different license plates that day, they should play that number. This isn't being bad at math, this is just being bad at reality.

Then there are people completely without hope in their lives that play the lottery. They reason that even if they save up every penny they spend on the lottery, they'll STILL be poor and unable to ever retire. Let's take somebody who makes 1500 a month at age 50, with no savings. Let's say they spend 5 dollars a day on lottery tickets, which ends up being 150 per month. Let's furthermore assume they never hit anything for simplicity. If they had instead saved that 150 per month, they'd have an extra 1800 per year. By the time they're 70 years old, they would have been able to save up a grand total of 32,000 (assume they invest their money in something that exactly keeps up with inflation, so it's 32000 in "real dollars"), which enough to support them approximately 2 years in retirement. Since these people have no hope to retire, they are looking for any way "out" they can. No matter how unlikely hitting the lottery is, they feel that the odds of getting out of poverty through hard work and sacrifice is even less likely.

To simply say it's a "tax on people who are bad at math" misses the reasons people play the lottery.

I suppose if a person has needs that can only be satisfied by a load of $$$, spending a few dollars would temporarily take the edge off the pain of knowing those needs will likely never be met. I don't have any needs like that, frankly. In fact I'm quite sure having a ton of cash would just mean having a ton of new problems, including new "friends" coming out of the woodwork with begging hands and sob stories.

And I don't get that "emotional itch" either. To me, it's like buring money for pleasure...I don't see where the pleasure comes from. Yes I understand some people get entertainment out of it, but I absolutely don't get it. But that's no big surprise to me, I'm out of step with a lot of stuff in mainstream culture.

Your example of someone foregoing two years of retirement to play $5 a day on lotto is probably realistic and common, and is a perfect example of how it works as a tax on people who are bad at math...and desperate.

 

[alt]

Agreed.

Also, you can be happy and poor (or doing fine) and still place a bet on getting rich.

Buying lottery tickets does not require you being a miserable money-grubber.

Agree.

Once a week, or a fortnight maybe, when I line up to spend a couple of dollars at the lotto counter, I observe no lack of old folk, pensioners, handing over $50, $100 - and the way they do it, the manner in which they're set up, indicates that they do this every week. That's just sad, and it seems to me to be gambling addiction. Where do they then get the money for food, living necessities, etc ?

But it's a very different thing to having a couple of dollars a week on a ticket or two. The former is harmful. The latter is relatively harmless IMO.

 

[Danger]

I know how to make a million dollars

So do I. I've done it. Unfortunately, as part of the plea agreement my printing press and plates were confiscated.

 

[mgb_phys]

I know how to make a million dollars.

How do you make a small fortune on the stock market - start with a large one.

 

[lisab]

How do you make a small fortune on the stock market - start with a large one.

 

[leroyjenkens]

What are the chances that the winning lottery numbers will be 1,2,3,4,5,6? So low that it's probably never happened anywhere in the world.
That's your chance of winning.

 

[alt]

What are the chances that the winning lottery numbers will be 1,2,3,4,5,6? So low that it's probably never happened anywhere in the world.
That's your chance of winning.

Chances same as any other six numbers.

There's big differences here. Folk like those who I referred to earlier, the $100 a week pensioners, are likely addicted gamblers, and compromise the rest of their lives. No aurgument.

But to buy the occasional lottery ticket, just for the fun, or for the hell of it, or even for the dim and virtually non existent chance that you might win, ain't no bad thing IMO. No harm done.

My kids spend $$$$ on CD's every week. Now THERE'S harm (to my aural wellness).

 

[Danger]

But to buy the occasional lottery ticket, just for the fun, or for the hell of it, or even for the dim and virtually non existent chance that you might win, ain't no bad thing IMO. No harm done.

My kids spend $$$$ on CD's every week. Now THERE'S harm (to my aural wellness).

Exactly. The harm comes when an addicted individual has access to gambling. I will put forth two examples which I was personally involved in.
In my last bartending stint, there was a woman who came in every day to play the VLT's and drink a couple of coffees. She occasionally won something decent, but not nearly enough to offset the 4 or 5 hundred dollars that she pumped into the machines. Once every month or so, her husband would come in with her and join in the endeavour. (When he was with her, they would purchase a couple of "paying" drinks such as vodka/Cokes). Anyhow, they daily gambled more than I made in a week, including tips. That concerned me. It was great for me, not only because it was a huge source of revenue for the business (and by extrapolation my paycheque), but also because they tipped hugely. If she won $500, for instance, she would tip me at least $20 just for cashing in her ticket. I asked her about it one day, because I was worried about how much she was spending. She casually explained that they were fairly well-off. Her husband worked as something important, such as an engineer, on drill rigs and was out of town for 6 weeks or so at a time. Gambling was their budgeted recreation. They didn't go out for movies, fancy suppers, tropical vacations, or anything else of that nature. All of their "fun money" went into VLT's. When the daily allotment was expended, they went home in gracious defeat.
On the other end of the spectrum was a woman who wasn't a friend, but a friendly acquaintance. (Okay... she was nuts, but so am I so it worked out alright.) She had a huge problem with gambling. One day, she ran through her available cash on the machine and approached me for help. I lent her $1,100 out of my own pocket and it was gone in less than 15 minutes. (Before anyone yells "sucker" at me, she paid it back in full within 2 weeks, as I knew that she would.) What gritted my gears was knowing that she had 2 kids sitting at home hungry because mom fired the grocery money into a machine. The irony (disgust? disillusionment? whatever) came from the fact that the provincial government which owns and profits from the VLT's is the same one which was paying her the Social Assistance (Welfare to Yanks) money that she was gambling away.

 

[Academic]

Originally Posted by Academic:
That is how rich people actually get rich, by following the math rather than purposefully ignoring it for a thrill.



Though they probably still buy the odd ticket - particularly when the pot reaches mega millions ..

No, I don't think so. Once one adopt the attitude of using probabilities for your advantage and then starts benefiting from it, why would one occasionally abandon the philosophy that has brought on the riches?

 

[Academic]

I don't understand why everyone is arguing the same flawed point. I think everyone here doesn't understand statistics (not just picking on lisab).

Statistics predicts behaviour over large data sets. It cannot be used to predict behaviour of one data point.

Individuals do win lotteries.

Yes, the statistical likelihood of winning is very low for any individual person - but that's not the operative math here, what's key is the principle of cost versus potential gain.

So what? So I spend $2 per week, and it takes me 30 seonds to do so. That's less than I waste in electricity leaving lights on around the house (and I'm OK with doing that).

I don't buy it. You are rounding down a small loss to zero loss in order to skew the cost/benefit ratio to something that justifies gambling. Over the period of your life you are faced with a great many of such stochastic processes, statistics do come into play - its not just one data point. If you live your life by constantly rounding down small losses in your head to conveniently justify taking part in bad odds, then you will end up losing pretty big over the course of your life.

 

[leroyjenkens]

Chances same as any other six numbers.

You're right, but 1,2,3,4,5,6 puts it in perspective. Nobody would ever choose 1,2,3,4,5,6 as their lottery numbers, but once they realize those numbers are just as likely to come up as any other combination, it puts it in perspective of just how bad their odds are at winning.
I don't blame anyone for playing, because it's not like nobody every wins, but a lot of the time, people don't understand probability. Hence why no one ever chooses 1,2,3,4,5,6 as their lottery numbers.

I don't buy it. You are rounding down a small loss to zero loss in order to skew the cost/benefit ratio to something that justifies gambling. Over the period of your life you are faced with a great many of such stochastic processes, statistics do come into play - its not just one data point. If you live your life by constantly rounding down small losses in your head to conveniently justify taking part in bad odds, then you will end up losing pretty big over the course of your life.

It can give you something to look forward to on Friday. That excitement some people get when they're about to hear the lottery numbers is worth the 1 dollar.
It's just money. No one spending a dollar a week on lottery tickets is going bankrupt. Over the course of a lifetime people will waste a lot of money doing a lot of different things. A lifetime is a long time.
I see what you're saying. Acting like a dollar is nothing while putting a dollar here and a dollar there can eventually add up. But how many different places could you possibly put that rounded down dollar per week? Again, no one is going bankrupt over the few rounded down dollars they throw away.

 

[Office_Shredder]

I don't buy it. You are rounding down a small loss to zero loss in order to skew the cost/benefit ratio to something that justifies gambling. Over the period of your life you are faced with a great many of such stochastic processes, statistics do come into play - its not just one data point. If you live your life by constantly rounding down small losses in your head to conveniently justify taking part in bad odds, then you will end up losing pretty big over the course of your life.

The point is that we end up losing pretty big doing all sorts of stupid things; leaving lights and televisions turned on when we aren't using them; not waiting for a sale before we buy new clothes when we don't need them right away; not remembering which gas station has the cheapest gas so we can save a couple bucks when we fill up the car. Buying a new car when a used one would be just as good wastes thousands of dollars, but I don't see people calling new cars a tax on the stupid. Not buying peanut butter in bulk can cost you loads of money over your lifetime but people do it all the time and aren't criticized for it

Why is buying a lottery ticket somehow worse than all of these? The point of buying a lottery ticket isn't in an attempt to make money on average, but for some reason anyone who buys one is judged to have purchased it for that reason

 

[Academic]

The point of a lottery ticket is to make money. And who says people arnt judged for wasting money in other areas of their life? Americans could seriously use a dose of fiscal responsibility and the lottery is one part of that. (and yes I do think that buying, or more specifically financing, a new car is a tax on the stupid.)

Regardless, the OP wanted opinions on if its worth it, and to me the answer is clearly no. The amount of time, money and emotional investment put into games of chance is not worth the potential gain. My philosophy is to always bet when the odds are in my favor, and never bet when they are not in my favor.

 

[Office_Shredder]

The point of a lottery ticket is to make money

No, the point of a lottery ticket is not to make money. The point of a lottery ticket is to have a chance to make a ton of money. You're probably one of those people who would base whether to take the banker's offer on Deal or No Deal based solely on whether it's better than the average amount of money you expect to make if you reject it, thinking you're being scientific about the decision even though it's a bad one

 

[leroyjenkens]

My philosophy is to always bet when the odds are in my favor, and never bet when they are not in my favor

If you had a 50/50 chance of winning the lottery, you wouldn't play it because the odds aren't in your favor?

 

[BobG]

On the other end of the spectrum was a woman who wasn't a friend, but a friendly acquaintance. (Okay... she was nuts, but so am I so it worked out alright.) She had a huge problem with gambling. One day, she ran through her available cash on the machine and approached me for help. I lent her $1,100 out of my own pocket and it was gone in less than 15 minutes. (Before anyone yells "sucker" at me, she paid it back in full within 2 weeks, as I knew that she would.) What gritted my gears was knowing that she had 2 kids sitting at home hungry because mom fired the grocery money into a machine. The irony (disgust? disillusionment? whatever) came from the fact that the provincial government which owns and profits from the VLT's is the same one which was paying her the Social Assistance (Welfare to Yanks) money that she was gambling away.

She was in a bar!

Is it worse for her to spend her kids' grocery money on lottery tickets or on alcohol? At least the money she plugs into the VLTs winds up going to support her and her family. Who gets the money she could have been spending getting drunk?

The fact that this woman has severe problems is more relevant than which particular problem she has.

That said, I do have a hard time understanding how anyone gets enough enjoyment from gambling that they'd spend their entire evening doing it.

Playing poker at a friend's house is fun, especially towards the end of the evening when people start getting bored with the game and start doing the silly things like stick one of the cards to your forehead so everyone but you knows what your hand is. In other words, I play for the laughter, not the winning or losing.

I don't know how a person could spend an evening playing poker in a casino, though.

 

[Academic]

If you had a 50/50 chance of winning the lottery, you wouldn't play it because the odds aren't in your favor?

No, then the odds would be in my favor. The chance gets weighted by the jackpot, so if the cost of the ticket is a dollar and the jackpot is more than a dollar then with 50/50 chance the odds are in my favor.

 

[Academic]

You're probably one of those people who would base whether to take the banker's offer on Deal or No Deal based solely on whether it's better than the average amount of money you expect to make if you reject it, thinking you're being scientific about the decision even though it's a bad one

I have no idea what that is. What would I do now?

 

[DaveC426913]

I don't buy it. You are rounding down a small loss to zero loss in order to skew the cost/benefit ratio to something that justifies gambling.

What? I did not round it down to zero. It's called an acceptable loss.

Over the period of your life you are faced with a great many of such stochastic processes, statistics do come into play - its not just one data point. If you live your life by constantly rounding down small losses in your head to conveniently justify taking part in bad odds, then you will end up losing pretty big over the course of your life.

I said nothing about generalizing to "living one's life". Just like with statistics, you can't use a generalization to say anything about a specific case.

Look at the merits of this case.

$2 per week is an almost completely absorbable loss. It is smaller than granular degree to which I normally budget money - it is below the signal-to-noise ratio. This is why I am also able to give some coins to a beggar and leave lights on in my house.
These last few are acceptable habots (by many people), yet they have zero potential for benefit.

The real world is not rigidly defined by math; the real world is messy with priorities and subjective value judgments and these must be factored in.

 

[Danger]

She was in a bar!

Is it worse for her to spend her kids' grocery money on lottery tickets or on alcohol? At least the money she plugs into the VLTs winds up going to support her and her family. Who gets the money she could have been spending getting drunk?

The fact that this woman has severe problems is more relevant than which particular problem she has.

I agree that she had (maybe still has) deeper problems. Alcohol was (is) not one of them. She didn't drink anything other than coffee that I know of. I certainly never served her anything else. She was dead sober any time that I've seen her, including at her home. (And I know about her home only because her roommate was a friend who I gave a ride to once. The woman was very attractive, and actually offered herself to me a couple of times, but I knew that it was tantamount to prostitution because she would have hit me up for more money—so I avoided the situation.) The last time that I saw her was while renting her a U-Haul trailer and rewiring her car to accept their incredibly stupid proprietary connections, in preparation for her move to BC. She's a nice enough person, but... good riddance.

 

[DaveC426913]

No, then the odds would be in my favor. The chance gets weighted by the jackpot, so if the cost of the ticket is a dollar and the jackpot is more than a dollar then with 50/50 chance the odds are in my favor.

And just where would you encounter such a situation?

 

[Academic]

Well, every time I don't play the lottery is one example. Others include non-gambling random processes. For example I rarely buy extended warranties based on the math, but I once did for a TV because I wagered that I would have a high chance of breaking it because of the unique way I was going to use it, so I did buy the warranty on it gambling that it would break.

There are lots of random processes we encounter in life where the odds are in our favor and we do take them, usually they go unnoticed because we are so used to taking those odds.

Anyway, it was an answer to the hypothetical that was posed to me, if I had a 50/50 on a standard lottery ticket of course I would take it - the odds would be in my favor.

 

[Danger]

I wagered that I would have a high chance of breaking it because of the unique way I was going to use it

Apprenticing for "Mythbusters"...?

 

[DaveC426913]

What I mean is, the chance of winning is basically the same, whether you buy a ticket or not. That people get sucked into thinking "But it could be me this week!" is a sad sign that most people really, really don't understand statistics.

No, it is a sign that people do understand statistics.

This

the chance of winning is basically the same, whether you buy a ticket or not.

is a sign of someone who is bad at math.

...thinking that almost zero is basically zero.

 

[Academic]

The chance of winning is closer to zero than the cost of losing is.

 

[Academic]

Apprenticing for "Mythbusters"...?

Heh, not quite. I did end up breaking the TV by the way, just months before the warranty expired. I got a check for more than I paid for the TV and turned my Tube into an LCD. I really won out on that one.

 

[DaveC426913]

To all you folks who think that "almost zero" might as well be "zero":

I guess in addition to not buying lottery tickets, you also don't wear a helmet when cycling. Or take a life preserver in a boat. Or install smoke alarms.

Hm. I wonder if there is an acceptable cost to (ensure/avoid) a circumstance - even though, for the majority of us, it will never come to pass in our lifetime. But we pay the cost anyway because the (benefit/detriment) is so great that we decide the cost is worth it...

 

[Academic]

Ha, dude - your the one who is claiming that the cost of a lottery ticket is effectively zero. It goes both ways. ;)

 

[bp_psy]

The chance of winning is closer to zero than the cost of losing is.

What exactly is the relevance of this comparison?

 

[Academic]

To decide whether to play the lottery or not, of course. Its the same kind of analysis we do throughout our lives in a variety of settings.

 

[bp_psy]

To decide whether to play the lottery or not, of course. Its the same kind of analysis we do throughout our lives in a variety of settings.

When you are buying a lottery ticket you are buy the very unlikely probability of winning. Once the ticket is in your pocket the transaction is over. You do not actually lose anything since you just bought something. If you do not win nothing the product you payed for was delivered. In the end the decision to play is determined by your desire to buy that product or not. I do not play but I know some people that play every week. Their attitude is along those lines.

 

[Danger]

...thinking that almost zero is basically zero.

Close enough as makes no difference to the vast majority. It's a losing proposition.
I'm going to avoid the lottery situation, because I'm not an expert and there are variables that are up to the consumer.
I do, however, have a limited amount of expertise regarding VLT's. My primary job at two of the bars was maintaining the machines and doing the accounting for them, and the same for the change machines. I'll stick with the last one for now. At that time, the population of my town was around 8,000; it's about double that now. I had 3 VLT's under my control. Two other bars in town have 8 machines each, one has another 3, my previous employer has 6, and I think that Boston Pizza has half a dozen or so as well. The one that I worked at was somewhat remotely located and not tremendously popular. Even at that, I was forwarding well over $100,000 per week to the Alberta Gaming Commission. During that same typical week, I paid out perhaps $5,000 to the "winnners".
Whenever I was down in Vegas to play pool, I spent most of my free time playing nickel slots, and only in the "loose corner" of the Riviera or a couple of similar machines in other establishments such as Barbary Coast. Those are set for a 97% payback rate. I could sit all day with a $2.00 roll of nickels, and get all of the free Scotch, beer, Margueritas, etc. that I could handle (and I have a huge capacity) while doing it. An entire day and night of entertainment for $2.00. (Okay, tack on another $20 for gratuities; I always tipped at least $1.00 for each drink delivery.)
Conversely, the VLT's owned by the Alberta Government offer something on the order of a 73% payback. That statistic, along with other machine perameters, is adjustable at any time through the real-time data link that is maintained between the machines and the Gaming Commission. (And in case anyone with nefarious intent is reading this, I hasten to point out that any interruption of that data link immediately locks the terminals down. No cheating that way.)