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Here’s $100. Can you win $800M at Powerball?

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Re: Here’s $100. Can you win $800M at Powerball?

#91

Post by malbs »

aus_ wrote: post #47

Free YC 2016 application: Build website to crowdsource $292,201,338. Buy all the lotto tickets. Pay back investors 150% of their investment. Make ~ $69.5M. (assuming lotto tickets are a $1) (someone else can figure out the break even point after taxes)

Also an extra edge to get you over the line - make sure you have a license to sell the tickets to yourself. Usually the vendors (newsagents, shops) etc that sell the tickets get a commission on each ticket ranging from 2% - 10%

It's the real free money part!

Re: Here’s $100. Can you win $800M at Powerball?

#92

Post by node-bayarea »

aus_ wrote: post #47

Free YC 2016 application: Build website to crowdsource $292,201,338. Buy all the lotto tickets. Pay back investors 150% of their investment. Make ~ $69.5M. (assuming lotto tickets are a $1) (someone else can figure out the break even point after taxes)

Even then don't you still have only 50% chance of winning as none of those numbers might get picked?

Re: Here’s $100. Can you win $800M at Powerball?

#94

Post by pyrrhotech »

guelo wrote: post #37
rdtsc wrote: post #18

The obvious equivalent for the HN crowd: "Here is $50k. Now quit your job and start a start-up" Difficulty bonus -- startup idea is generated by a Markov chain and could be anything -- "Uber for dogs", "Taxidermied pets as drones" etc.

1. The odds of succeeding at a startup are a lot better than 292 million to 1. 2. You get a paycheck, even if it's less than market rate. 3. It's fun and exciting to use someone else's money to try to come up with a new business type.

In most cases, it takes many months or years of unpaid work before you can even get VC funding or revenue of any type for your startup. And most startups fail before they even reach that state.

Re: Here’s $100. Can you win $800M at Powerball?

#95

Post by trevyn »

m-i-l wrote: post #65
maxerickson wrote: post #10

This is a fascinating sentence: While the large jackpot prize may be tempting, it's extremely hard to have that one ticket in 292 million. I think my favorite part is that extremely hard isn't a very accurate description of how unlikely it is.

To put it into perspective, a bookmaker in the UK offered odds of 14 million to 1 for Elvis Presley crash landing in a UFO on top of the Loch Ness monster[0]. [0] A quick Google returns a number of sources, but I'm going to use this one: http://www.elvisnews.com/news.aspx/gamblers-give-up-on-elvis...

How much did he have to pay to insure those bets?

Re: Here’s $100. Can you win $800M at Powerball?

#96

Post by dreaminvm »

aus_ wrote: post #47

Free YC 2016 application: Build website to crowdsource $292,201,338. Buy all the lotto tickets. Pay back investors 150% of their investment. Make ~ $69.5M. (assuming lotto tickets are a $1) (someone else can figure out the break even point after taxes)

Would not work unless it ballooned into 10 figures. Lump sum taxes would take most of the gains away and that assumes you are the only winner.

Re: Here’s $100. Can you win $800M at Powerball?

#97

Post by nandhp »

jbondeson wrote: post #48
mmanfrin wrote: post #36

Question: With a jackpot of $800mil and the chances of winning 1 in ~300mil, could you not buy 300mil tickets? (Excepting, of course, the risk that someone else wins and the cost of taxes).

The cash payout is ~$500 million, and after taxes you may end up with $309 million. So, yeah, probably not a winning strategy.

Well, it sounds like you'd be at least $9 million richer than you were before. And gambling losses are tax deductable, up to the amount of your winnings, so if I understand tax deductions correctly wouldn't you be taxed only on about $200 million of the cash payout?

https://www.irs.gov/taxtopics/tc419.html https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Can...

Re: Here’s $100. Can you win $800M at Powerball?

#99

Post by gvb »

kinofcain wrote: post #75
QuotedForTruth wrote: post #31

Earlier quoted context omitted.

Its not exactly the same but its pretty close when the chances are so low anyways. Playing 10,000 times in 1 drawing gives you the probability of winning the jackpot: 0.00003422297813=10000/292201338 Playing 10,000 times in 10,000 drawings gives you the probability of winning the jackpot: 0.00003422239258=1-((292201338-1)/292201338)^10000 The difference gets more significant if you play more. For 10 million plays its…

Not just nearly identical to each other, they're nearly identical to zero. So your odds of winning are effectively the same whether you play or not. It approaches 1.0 as you buy more tickets, but even at $800m, the lump sum payout of $491m is still lower than the cost of buying all possible $2 tickets ($584m). And even if you could buy all tickets you still might have to split the winnings...

+1 for pointing out that it is actually a $491MM payout that you can choose to take as a $800MM annuity over 20(?) years.

You also have to subtract taxes from the payout, which also eats into the payout. I would expect it would be 30% or higher, depending on how much you spend on a tax lawyer (which, of course, cuts into the payout as well).

The only[1] way to win is to not play.

[1] Odds are 292,201,338 to 1 of winning by not playing.

Re: Here’s $100. Can you win $800M at Powerball?

#100

Post by jholman »

QuotedForTruth wrote: post #31
baldeagle wrote: post #6

Isn't this the wrong problem? It lets you enter X dollars, then it simulates if you played $1 on X numbers of sequential drawings... which would have terrible odds. Wouldn't it be better to simulate X numbers on Y draws, which would lead you to know the number of times/people would have to play to win. I don't think probability is communicative, is it? EDIT: It would also be neat to simulate the number of winners you…

Its not exactly the same but its pretty close when the chances are so low anyways. Playing 10,000 times in 1 drawing gives you the probability of winning the jackpot: 0.00003422297813=10000/292201338 Playing 10,000 times in 10,000 drawings gives you the probability of winning the jackpot: 0.00003422239258=1-((292201338-1)/292201338)^10000 The difference gets more significant if you play more. For 10 million plays its…

It's true that if you play all your tickets in one drawing, you have a higher chance of winning the jackpot at least once, especially as your number of tickets approaches the number of total tickets. However, your expected value does not go up, because you lose the chance of winning the jackpot more than once.

For an extreme example, consider a lottery with only one number, selected from 1 to 2, costing $1 per ticket, with a $2 jackpot.

Buy 2 tickets at once, you lose $2 on tickets, and you get $2 back. Expected net return, $0 (with probability 100%).

Buy 1 ticket per draw for 2 draws, and you have a 1/4 chance of winning nothing (net -$2), a 1/4 chance of winning both jackpots (net +$2), and a 2/4 chance of winning one and losing one (net $0). Same expected value.

Of course, in a real lottery, usually[0] the expected value is negative. So what's happening is like anti-insurance. In both cases your expected value is negative, but you pay the insurance company money to lower your variance, and you pay the lottery money to raise your variance.

[0] Usually? Well, in theory with a cumulative jackpot the jackpot might get high enough to make the expected value positive... except that usually as the jackpot rises, the number of players rises too, such that you have to take into account the possibility of having the split the jackpot, which of course would cut your take in half, or worse.

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