So you’re thinking of parting with a small sum of your money in return for a miniscule chance at winning the Big Prize, the Brass Ring, the Instant Retirement Bonanza, but you just can’t bring yourself to do it. Well, here’s a few reasons you can use to rationalize that minor expense, the Lottery ticket.
1. You’re (really) bad at math. Let’s look at the numbers. In a “standard” Lottery, say 6 balls from 1-50, the number of possible combinations is C(50,6), or roughly 16 million. That’s not so bad, you think, and you’d be right, but these kinds of lotteries rarely get into the rarefied air of the $50M or $100M payout, exactly because there are so “few” combinations. Replace that last ball with a “bonus ball” of 1-30, and now you’re at 30*C(50,5), more like 63.5M combinations (bonus balls can be the same number as any of the other balls, which greatly increases the number of possibilities). How’re those odds looking now? Well, what if the payout is $100M!? That’s still a good bet, right? It would be, if you got to keep it all. At today’s tax rates, and taking all the money up front (which you’d be really bad at math not to do), you end up with only 30% of the payout. I could go into how easy it is to get 2 or more winners on the same set of numbers, cutting your jackpot even more, but I think you get the point. The Lottery is so very rarely a “good bet”.
Continue reading 5 excellent reasons to play the Lottery