I know people absolutely waste their money on lotteries, hoping for a big prize. One redeeming feature is that, at least in NY State, the money they rip off people goes toward our schools.

UNfortunately, the "money goes to our schools" myth is very deceptive. True, some of the NYS lottery proceeds are earmarked for education, but in fact this only displaces funds that are then readily directed to the general fund coffers
for waste like the REST of our enormous tax burden.

However, I do take solace in looking upon the lottery as an OPTIONAL tax that I personally choose not to pay.

Some refer to government-run lotteries as a "voluntary tax on the stupid".

o j

"voluntary tax on the stupid"

Good one OJ!

Much as I agree with the foregoing comments about lotteries, I do think there are two circumstances in which they might make sense.

The first one is that in some circumstances, $1,000 is more than a thousand times as valuable as $1. Here's a simple hypothetical example. Suppose that you absolutely need to come up with $100,000; if you don't, you will be killed. Suppose further that you can raise $60,000, which isn't enough.

Now suppose someone comes along and offers you the following proposition: You toss a coin; if it comes up heads, he gives you $40,000, if it comes up tails, he takes your $60,000. Wouldn't you take it? Because if you don't, you will surely die, but if you do, you have a 50% chance of living. The fact that betting $60,000 against $40,000 on a coin toss is unfair doesn't really matter.

Similarly, many people who play lotteries regularly probably figure that the amount of money they spend doesn't matter to them, but winning might make a real change in their lives. Irrespective of whether their math is right, perhaps those decisions aren't as pointless from a psychological viewpoint as they might appear at first. And I'm saying this as someone who doesn't play the lottery.

There is a second, rare circumstance in which it makes sense to play the lottery. Some lotteries work by distributing a fixed fraction of the bets to everyone who has bet a particular number. Which means that if you can pick a number that few enough others have picked, the odds are actually in your favor.

This technique doesn't work nearly as well when lottery sellers offer to pick random numbers for you--but once upon a time I had a friend who used this technique successfully. At the time, he had access to a lottery that let you pick three digits, and paid off half the proceeds to everyone who had gotten them right.

This lottery offered the opportunity to "box" a number if all three digits were different. For example, if you bet 346 and boxed it, you would effectively be placing equal bets on 346, 364, 436, 463, 634, and 643.

He reasoned as follows: (1) If you picked two identical digits, you couldn't box the bet, so many people would avoid it. (2) Other people wouldn't realize that you could place a bet with a 0 as the first digit. (3) Anything with 7 or 11 in it would be popular, and hence should be avoided.

As a result, he hypothesized that 066 or 088 would be unpopular enough to be worth playing. Sure enough, the first time one of those numbers came up, it paid off enough to justify having played it.

But these situations are unusual. In general, I agree that lotteries should be considered an optional tax that one should choose not to pay.

What ... no takers?

Yeah, right - the folks who post here are smarter than most.

o j

Gambling of any kind strikes me as plain stupid. If a casino has a 95% percent payback, then it's like giving someone $100 and he gives $95 back to you. Only you have a little fun and get some bright lights and noise.

If a night at the casino is worth it for entertainment, for you, fine.

But, if you call it an "investment" ...

... forget it!

That's not my idea of a good time.

But - I won't spend over $100. to attend a hockey/basketball/football/baseball game, either.

To help an overpaid athlete get Ten Million or so a year?

No, thanks.

I have a different system of priorities than that.

ole joyful

I agree with your points in general, but there are times when it is wise to buy a lottery ticket. Occasionally, jackpots get really huge, which bring the expected value of the ticket to greater than one dollar. I.e. using basic stats if you have a mega powerball jackpot of $350M, with a cash payout of $250M today, even after taxes (say 33%) you would be left with $150M. If the odds of winning are one 1 in a 100 millions, your ticket (statistically) is worth $1.5, even though you only paid $1. And that is not including the entertainment value of buying the ticket and enjoying the dream.

Now that's rare and I wouldn't base my life investments on this, but there was a case where a group of aussie investors bought all the numbers in a state lottery (VA?) a few years ago and made a healthy return.

Hi youbiquity,

It'll be darn seldom that the gov't.'ll run a lottery where they're going to make a larger payout that their total take!!!!

Imagine all of the printing, distribtion costs, employees to pay, security, etc. in addition to the massive payout.

Once in a blue moon??? If ever.

By the way, your calculation included an allowance for taxes.

If you participate in Canadian lotteries - no tax to pay!!

Of course, if the U.S. gov't. finds out about your win, and claims that you owe them ...

... time to make a quick move to Canada (to enjoy your millions)??

Go ahead and buy 'em, if you can justify that purchase to yourself (you won't catch me doing it) ...

... but if you think that you may con me into paying you $1.25 for $1.00 pay to me on your part, claiming that the lotteries sometimes get taken for a ride ...

... forget it - I ain't gonna bite!!

Have yourself a great week.

ole joyful

Hi again youbiquity,

You didn't, perchance, get struck by lightning, did you?

I just wondered about some of your reasoning.

o j