Lottery Tickets - Do You Spend Money to Test Your Luck?

[Deactivated] on 25/12/2019 - 14:55
Last edited 28/12/2019 - 12:12

no one has ever said good things about buying lottery tickets but people will buy them. Recently, my interest has grown in this topic and bought dime tickets and obviously didn't win but i haven't come to a conclusion yet. What if some bucks are spent every fortnight roughly under $12 on major draws as it would harm my bank anyway.

I was also thinking about adding more people in the pool so loss/win can be shared and more tickets can be bought.

How do you see lotteries? waste of money or worth a try. How much do you spend on it.

Please take a note that this is regarding lottery tickets not other gambling games.

Poll Options

  • 9
    Buy em
  • 54
    Do not buy em
  • 10
    Don't spend more than $50 p/a
  • 18
    Spend from $50 to $200 p/a.
Financial

Comments

  • oscargamer on 25/12/2019 - 15:06
    +49

    Statistically, you will always lose money in the long term.

    • Scrooge McDuck on 26/12/2019 - 14:17
      +2

      The lottery in general is gambling, and gambling is for losers. But there are rare occasions when the jackpot is so high that the expected value becomes positive.

      • ribbonsofnight on 26/12/2019 - 15:17
        +3

        This would occasionally be true, if you could guarantee you would be the only one playing your numbers

      • mrvaluepack on 26/12/2019 - 21:30
        +4

        The noobs that negged you dont understand how expected value is calculate. You are correct, these rare positive EV moments usually happen for any game with a progressive jackpot.

        • p1 ama on 27/12/2019 - 03:33
          +7

          You are correct, these rare positive EV moments usually happen for any game with a progressive jackpot.

          Yes, but the more the jackpot is, the more people play as well. It's almost impossible to calculate the EV of lottery because the winnings are split amongst the winners, so you have to know how many people are playing to be able to calculate an EV.

          It's more complicated than finding the probability of winning and multiplying that by the jackpot amount.

          • mrvaluepack on 27/12/2019 - 07:46

            @p1 ama: True, but you can usually use past number of div one winners to average/estimate the number and make your decision from there.

            • p1 ama on 27/12/2019 - 20:00
              +5

              @mrvaluepack: No, that won't work because what you are assuming is that the number of past division one winners is a consistent estimator for the number of future division one winners. That's certainly true (so you're correct), but the variance is so high that the convergence to the true value would be really slow.

              The only real way to solve this problem is to try and model the number of players based on the jackpot size using some regression model and then try to model some time dynamics into there as well to model how that number changes through time. Based on that, you can estimate the "expected number of winners" so to speak, and figure out the "expected first division prize", which you can multiply by the probability of winning to get what you want.

              It'll be a bad estimator, highly biased, because your estimator is the product of two estimators and in general, E(AB) =/= E(A)E(B). It's probably the best we can do though.

              Edit: It's possible to probably estimate it using Monte Carlo methods, but I'm not sure what the computational requirements would be given that the variance is very high so you'd need a really long chain to get any sort of convergence. Anyway, that's probably the best way to actually calculate the EV of a lottery.

    • blimpyboy on 26/12/2019 - 18:51
      +1

      Your advice is great in general, but strictly speaking it isn't true.

      There are some (albeit very, very rare) lotteries around the world which have marginally positive expected returns, which means if you played them enough times you could reasonably expect to win.

      The reasons behind this are complex, but typically are because in an effort to create new and interesting lotteries, the lottery makers sometimes introduce non-random features which subtly change the probability distribution of events, skewing them in a favour. Why would they do this? Sometimes they don't realise (companies are run by human beings after all), and other times it doesn't matter to them who wins, as long as they don't lose.

      I stress that these positive value lotteries are very, very rare. Judging by the nature of OP's questions, @oscargamer's advice looks spot on.

    • trapper on 26/12/2019 - 20:04

      Also in the short term.

  • Heaps for Cheaps on 25/12/2019 - 15:32
    +7

    A lotto ticket can change your life, and you have to be in it to win it. I am not a fan of syndicates though as generally its too hard to organise or even take part. For me, lotto is a solo game.

    I spend about $200 a year across maybe 15 draws & then compound winnings into more tickets. I spend what I won't cry over losing.

    Good luck to you, me and all playing OZbargainers!

    Also, I heard a recent story about a retired man and his wife, purchased each the same Set For Life ticket and they both won… $20k a month for 20 years. Crazy luck.

    • xoom on 25/12/2019 - 16:08
      +11

      I spend what I won't cry over losing.

      This is just it. If one playing the lotteries have to weigh out groceries for the week or playing the lotteries. Then sorry you are getting your priorities wrong.

      The money I spent on the lotteries I won't lose sleep over at all if I don't win. I'm just in it to win it.

      • readeral on 27/12/2019 - 08:15
        +4

        In it to win all the money that others should've spent on their groceries.

        • xoom on 27/12/2019 - 10:26
          +2

          In every gambling there are problem gamblers. Who clearly needs help. However you know what they say. You can only lead a horse to water but you can't make it drink.

    • Ryanek on 25/12/2019 - 17:13
      +8

      You correlate lotto buyers to their IQ? Yeah okay mate.

      Pretty sure you'll get negative votes because your come across as an a**.

      • brendanm on 25/12/2019 - 17:16
        +16

        He's not wrong though.

        A 2011 paper in the Journal of Gambling Studies conducts a thorough review of the available research on lotteries and concludes that the “poor are still the leading patron of the lottery and even the people who were made to feel poor buy lotteries

        • Heaps for Cheaps on 25/12/2019 - 17:25
          -8

          This US-based research paper categorises 'scratch-its' within the definition of 'lottery', but I am fairly certain the the OP and fellow OzBargainers read 'lotto' to not include 'scratchies'.

          • brendanm on 25/12/2019 - 20:24
            +13

            @Heaps for Cheaps: They are the same thing. A purely chance based game with extremely poor odds.

        • Spic3y on 26/12/2019 - 19:46
          +5

          OP mentions stupid people, not poor people. They don't always correlate.

        • OzzyOzbourne on 27/12/2019 - 10:42

          You equate poor to being stupid

      • garetz on 25/12/2019 - 18:09
        +9

        stating a fact and being an ass is not mutually exclusive.

  • brendanm on 25/12/2019 - 17:14
    +4

    It's literally just statistics. Look up the odds, figure out if it's worth doing.

    • Diji1 on 25/12/2019 - 17:37
      +4

      It's a terrible use of money compared to investing in shares.

      • brendanm on 25/12/2019 - 19:12
        +22

        It's a terrible use of money compared to pretty much anything.

        • AbsX on 26/12/2019 - 13:31

          Still better than pokies, unless you spend $1000s per draw, usually it will take longer to drain your money playing lotto

          • brendanm on 26/12/2019 - 15:02
            +1

            @AbsX: Pokies are for morons as well. All forms of gambling are designed to remove your money from you, the odds are never in your favour, and the house always wins, that's why casinos have massive profits, and the plebs going there don't.

            • AbsX on 26/12/2019 - 16:09

              @brendanm: No shit

            • AbsX on 27/12/2019 - 14:06

              @brendanm: Some people are just compulsive gamblers. Maybe for them, it's beneficial to gamble on something where it takes longer for them to lose their money.

              • brendanm on 27/12/2019 - 14:15
                +1

                @AbsX: I think it's beneficial for them to seek help.

                • AbsX on 28/12/2019 - 19:57

                  @brendanm: No arguments there, I'm not the person you need to convince =)

            • Choc0 on 28/12/2019 - 00:26

              @brendanm: Only two ways to make money 'gambling'

              1. Get good at Poker. Beat other chumps. This becomes more of a game of skill, less about probability over the long run.

              2. Arbitrage sports betting promotions. Plenty of sites out there which can guide you.

              Lotto, pokies, casino games and other random betting is the same as setting your cash on fire.

        • casey2 on 26/12/2019 - 18:21

          BMW?

      • 00 on 27/12/2019 - 09:44

        Depends what shares and when. Also you assume there is existing money to invest or capacity to borrow for leverage.

        Plus, your $15 lotto ticket would only just cover brokerage.

        • JoJoker on 27/12/2019 - 19:01
          +1

          I only buy the single $1.50 tickets (or $4.50 for the other draw) – really won't miss it 10 times a year.

    • ribbonsofnight on 25/12/2019 - 23:28

      You don't even need to look up the odds. The odds aren't going to be in favour of buying lotto tickets.

    • gromit on 26/12/2019 - 20:42

      Hell even betting on the horses or sporting teams or the pokies in the pub have better odds/returns. It doesn't make sense, however I will claim to be guilty of occasionally buying a ticket or going in work syndicate.

    • Miss B on 27/12/2019 - 00:31
      +1

      While I don't usually buy tickets myself, I can see why people would spend money (that they can afford to lose) on lotto even if they know they're unlikely to win. Try telling the people who have won jackpots that they're morons and shouldn't have spent money on lotto. They had as much chance to lose as anyone else before the numbers were drawn.

  • p1 ama on 25/12/2019 - 17:27
    +51

    I'm a statistician, most people don't understand statistics and probability, especially those who have a small understanding of statistics and probability. Most people who say "statistically" do not actually know what they're talking about.

    Yes, by playing the lottery, you will generally lose in the long run, because your EV is negative. However, that's largely irrelevant because you don't look at playing the lottery as an investment. The variance is so huge that when we're talking about some sort of long run convergence to the mean EV, it's going to take millions of generations (literally).

    People play lottery because of the variance. The loss of not winning is relatively small (unless you're spending hundreds a week). The winnings are real. In other words, don't play the lottery as an investment. Play it as a game and hope for the best.

    • oscargamer on 25/12/2019 - 17:51
      +24

      Statistically, statisticians are very boring people. They have great fun partying with accountants.

      • ribbonsofnight on 25/12/2019 - 23:30

        At first I thought you were an idiot taking a dig at statisticians then I realised the irony was deliberate.

        • Scrooge McDuck on 26/12/2019 - 14:33

          Did you hear that we landed on the moon?

      • Username checks out on 27/12/2019 - 09:33
        +2

        100% of people who use statistics in forums are boring.

        • furyou on 27/12/2019 - 09:55
          +2

          89% of statistics are made up on the spot

    • brendanm on 25/12/2019 - 20:26

      The people who play lotto the most are generally low income, so proportionally they spend a large amount on lotto. Statistically, they would be much better off putting the money into a savings account.

      • p1 ama on 25/12/2019 - 20:30
        +5

        Statistically, they would be much better off putting the money into a savings account.

        Yes, of course. That's what I said - you shouldn't play lottery as an investment. If it's just a game, because it's fun to check your numbers and you enjoy the thrill of possibly winning something, then sure.

      • furyou on 27/12/2019 - 09:56

        The people who play lotto regularly the most are generally low (something else), I would say.

  • Diji1 on 25/12/2019 - 17:36
    +7

    Lotteries are a tax on stupidity as the saying goes. I'm paying stupid tax but I restrict myself to the really large jackpots which is 80 million or higher. I try and keep the level high enough that I only spend $100 a year or so, so three lots of 25 games or whatever it is.

    The chances are so low that you may as well not play it.

      • p1 ama on 25/12/2019 - 18:45
        +2

        Statistically, the probability is, that those same people are also known as dole bludgers. ;)

        If you're gonna use the word statistically, at least back up what you're saying with actual numbers. I'd actually be interested to see which groups tend to gamble and/or play lottery the most.

        Fair enough if it's your suspicion or anecdotal experience, but that's hardly "statistically" anything.

        • oscargamer on 25/12/2019 - 18:54
          -4

          I was being sarcastic, after your first post that belitteled us non-statisticians.

          • p1 ama on 25/12/2019 - 19:13
            +2

            @oscargamer: Nice cop out there. I didn't belittle non-statisticians, I called out anyone who just puts the word "statistically" in front of things and acts like that lends some sort of weight to their claims.

            e.g. "statistically there are a lot of stupid people"

            • oscargamer on 25/12/2019 - 19:24
              -8

              @p1 ama: Statistically, there ARE a lot of stupid people. In fact, statistically, there are exactly the same amount of stupid people as non-stupid people, given the statistical distribution of the IQ bell curve (assuming the delineation between stupid and non-stupid is 100)

              • p1 ama on 25/12/2019 - 19:40
                +5

                @oscargamer: You're really going to try and argue that "statistically there are a lot of stupid people" as some sort of factual statement? Things you need to address:

                1) Define what you mean by "a lot", is it 1%, 5%, 10%, 25%, 50%, 80%?

                2) Define what you mean by stupid

                Given that both these terms have no well-defined meaning, you can't say anything statistical at all because whatever you are saying is based on your own anecdotal experiences. That's an opinion, not a "statistical" fact.

                there are exactly the same amount of stupid people as non-stupid people, given the statistical distribution of the IQ bell curve (assuming the delineation between stupid and non-stupid is 100)

                This is also wrong. If someone is either stupid or non-stupid (you have to be in either set by definition, as they are complement sets), then this statement will only hold if and only if you define "stupid" as someone with an IQ below the 50th percentile.

                There is no other definition that will have the number of stupid and non-stupid people add up to the entire population.

                • oscargamer on 25/12/2019 - 19:45
                  -4

                  @p1 ama: "then this statement will only hold if and only if you define "stupid" as someone with an IQ below the 50th percentile." which is what I did by saying that that delineation point is an IQ of 100…….which is has to be, STATISTICALLY :)

                  This is going to go on and on and on…..

                  • p1 ama on 25/12/2019 - 20:27
                    +2

                    @oscargamer:

                    This is going to go on and on and on…..

                    I think this all started because you perceived something I said as a personal attack when it was never intended as one. I'll state it again - I had no intention of offending you and my original statement wasn't even directed at you personally.

                    My broader point is that anecdotal evidence is not "statistical" in any sense, even less so when it's hidden behind layers of assumptions and claims that can't be proven.

                • ribbonsofnight on 25/12/2019 - 23:35
                  +1

                  @p1 ama: Statistically 50% of people have below median intelligence. Beyond that it's really hard to say anything at all.

        • arkie0 on 25/12/2019 - 21:15
          +3

          Statistically, there's always a high chance on OzB of 2 stupid people having a stupid argument.

      • AbsX on 26/12/2019 - 13:35
        +1

        Replace statistically with anaecdotally in your sentence and maybe ozbargain will have 1 less fool on these forums

    • orangetrain on 26/12/2019 - 01:34
      +1

      Statistically, you have a higher chance if you combine all lottery attempts to at most once per year (assuming same chance, etc)

      • JoJoker on 28/12/2019 - 10:49

        People dont play for higher odds, they play for fun and to dream. Buying a ticket a week for $1.50 buys them a lot of dreaming throughout the year.

    • Krankite on 26/12/2019 - 16:57

      I'm in this boat, if the jackpot is rare enough that it becomes "water cooler" conversation then I will usually but in for the entertainment value of discussing what you would do if you won. I don't but in with any expectation of winning though.

  • Strahany on 25/12/2019 - 21:03
    +6

    Compared to other forms of gambling, like sports betting, the EV is atrocious. But trying to turn $10 into, say, $20 million through sports betting would take an insane amount of time just to place the bets alone (and that’s before considering research and such which helps to improve the EV).

    The way I see it, there is a very small chance that I will ever come across a life changing amount of money. All other income windfalls will likely just be ‘nice’, like a holiday, car, or paying down some mortgage (or getting a deposit together). So I’ll enter draws that are $20 million and above, since the odds of winning don’t change, and I consider that value to be enough of a life changing amount to justify the near guaranteed loss of $8-$14 a pop.

    • ribbonsofnight on 25/12/2019 - 23:38
      +1

      The odds of winning the first prize in a lottery might not change but the chance of sharing that money sharply increases when the first prize is bigger which means that it's not as good as it seems. Of course if you were the only one entering the big lotto draws would have positive EV.

  • Almost Banned on 25/12/2019 - 21:26
    +3

    Lotteries are hard to justify on any level.
    For the players - the chance of a win are astronomically low = no deal.
    For the charities - it seems there is some evidence (US based) that a good number of the people paying for lottery tickets are also likely to require charitable assistance. This circular payment = no deal.
    For society - lotteries are probably the worst way of restributing wealth = no deal.
    Lotteries also are often not good for the winners - too many stories of how a jackpot ruined someone's life = no deal.

    I am happy to respond with an invitation to collect money for the office 'let's flush our money down the toilet' syndicate in response to the lotto emails though.

    • ribbonsofnight on 25/12/2019 - 23:40

      The only thing in favour is they might not be as likely to ruin lives as other forms of gambling and addiction

  • Placebo on 25/12/2019 - 22:04
    +9

    I play Lotto online through the Lotterywest app. Through the app you can play one or two lines in each draw and it only costs a few dollars. I don't spend more than I am happy to lose. I'm very clear on the odds of winning and have no expectation to ever win anything, what I'm buying is hope because without a lotto ticket, there is no lotto dream.

    I'm happy to part with those few dollars in exchange for a little bit of joyous hope.

    • ribbonsofnight on 25/12/2019 - 23:42
      +2

      If it's costing you $200 a year I can sympathise. I prefer to have $200 a year in my bank account or invested.

      • xoom on 26/12/2019 - 00:35
        +4

        I prefer to have $200 a year in my bank account or invested.

        And that's just it. A personal preference. No one is taking or asking for your money so they can spend it on the lotteries.

        Some like placebo prefer to buy a lottery ticket rather than invest this money or bank it.

  • Hoobz on 26/12/2019 - 08:20
    +28

    So many in here missing a huge point.

    No on has mentioned 'dollar to entertainment' values.

    For example. Take two identical people. Same jobs, same income etc.

    One gets excitement from spending money on partaking in motorsport (or any other activity), spends $$$.

    One gets excited about buying a lotto ticket for… $15.

    Lotto buyer is ahead financially, and has some sort of chance of getting some money back. Both got some excitement out of it.

    All about context.

    • nomoneynoproblems on 26/12/2019 - 16:37
      +17

      I thought this was a Super ad for a minute.

    • johnwinds on 27/12/2019 - 11:01
      +6

      No one has yet mentioned the true cost of this futile activity: the false hope factor. By thinking "maybe I'll win the lottery, I don't need to do anything else", these people put off the activity of actually doing something that has a chance of improving their finances (i.e., starting a small business, investing etc).

      Also, the "you've got to be in to win it" catch-phrase is a truly scary example of conditioning by advertising.

  • OzHunterNSW on 26/12/2019 - 09:39
    +2

    Many myths and Movies base their story line on situations of seemingly slim odds - a King is foretold of a miraculous birth which will result in his downfall, so he sets out to prevent this occurring.
    The child is sent adrift upon a river, or sent into exile, only to find his true identity and usurp the ogre King.
    But these are all myths and surely would not have any influence on our advanced society, what so ever.

  • SuperMid on 26/12/2019 - 13:49
    +2

    I might spend $10 a month. sometimes i just win the $10 back, sometimes i lose it. oh well.

  • Winston100s on 26/12/2019 - 14:04
    +2

    One thing is for sure, if you don't play you can't win.

    • pikapika on 26/12/2019 - 17:43
      +4

      Duh 💁‍♂️

    • freakatronic on 27/12/2019 - 00:34
      +1

      Also if you do play it's highly probable that you can't win :)

    • bio on 28/12/2019 - 22:13
      +1

      You can't lose either.

  • Name on 26/12/2019 - 14:26
    +2

    It's terrible use of money but I still buy it because you've got to be in it to win it. Although the chance of winning is so small that it's effectively the same if you have one or a hundred tickets.

    So, I limit it to the smallest possible gamble. Golden Casket has Ozlotto at $1.30 and powerball at $4.85 and Gold lotto at $2.90. I also only bother if it's in the tens of millions.

    • trev likes bargains on 26/12/2019 - 14:53
      +4

      it's effectively the same if you have one or a hundred tickets.

      That's not how it works. You are almost 100 times more likely to win if you buy 100 vs 1

      • Name on 26/12/2019 - 15:18
        +2

        Haha. You're right. But when your chances of winning are 1 in 134 million (depending on lottery you buy) whether you have 1 or 100 tickets your chances of winning are so small that it could be considered effectively the same.

      • AbsX on 27/12/2019 - 14:08

        That's not how it works. You are "exactly" 100 times more likely to win if you buy 100 vs 1

        • trev likes bargains on 27/12/2019 - 14:45
          -1

          You forgot to factor in that buying more tickets increases the entire pool. It would be "exactly" only if the pool is a predefined number of tickets. It is not the case in a lottery.

          • AbsX on 28/12/2019 - 01:18

            @trev likes bargains: Sorry, guess I don't play lotto often enough. Makes sense even if the result is a miniscule below 100x

  • DarthAntz on 26/12/2019 - 15:04
    +4

    I once saw a guy get $200 worth of tickets checked at the newsagent and didn't win anything. That was an experience to know that we're better off collectively not contributing to vices of the chance to win money. By buying into the lotto, you are making the experience of losing easier to accept and achieve time and time again.

    I'd rather not play and not win than contribute to a cycle of loss designed for the house to constantly win.

  • Bid Sniper on 26/12/2019 - 15:18
    +6

    optional Tax on poor

    • ribbonsofnight on 01/01/2020 - 23:18

      it's optional for poor and rich alike but sometimes it seems mandatory for the people who don't want to understand the maths

  • pookie on 26/12/2019 - 16:40
    +2

    I usually spend around $500 every 3 months on Lotto/Powerball/Oz Lotto tickets. The most I have won on any ticket is $480. Currently I am down around 3k. But whatever, I would probably spend that on pokies if I didn't play the Lottos. I like knowing I have a chance 'even if small' at a big win. Each to their own I guess :)

  • Seaeagles on 26/12/2019 - 17:16

    I go halves in a powerhit ticket in Powerball when division 1 is $50,000,000 or more with a bloke at work.
    That ticket cost us about $25 between us and usually, it is only that high about 6 times a year.
    We know we are never going to win or be finically in front but as they say, you have zero chance without a ticket or maybe 1 in 100,000,000 being in that draw but that is still a chance.
    I'm not going to miss $100 a year or become rich by not using that money on tickets.
    The what-if talk is worth wasting that small amount of money.
    What you call a waste of money isn't to the next person. I see people spend money on things that I think is a waste and stupid but to they enjoy it and feel its value for money.

  • Blargman2001 on 26/12/2019 - 17:16
    +1

    Every now and then I'll buy a lotto ticket in one of those $50 million powerball draws. I know the odds for Powerball (about 134 million to one). I don't expect to win but it's fun dreaming and sometimes you might win $20, which can still put a smile on your face. When you buy a ticket you treat the money as gone but in return you get to play the game. The thing is, some people just enjoy being part of the game, some don't and some don't see it as a game at all (and lose everything).

  • Kenji2014 on 26/12/2019 - 19:21
    +4

    The lottery is a tax on the poor.

    • TheBird on 27/12/2019 - 20:58
      +3

      tax on the poor.

      Fixed it for you: Tax on the dumb.

      • ribbonsofnight on 01/01/2020 - 23:20
        +1

        As a maths teacher I'm tempted to say a tax on those who are bad at maths but I know maths ability means very little about whether people waste their money on lotto tickets.

        • TheBird on 02/01/2020 - 00:42

          True that but doesn't sound quite as good.

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