on lottery jackpots

[edenfalling]

I hate multi-state lotteries. Hate them, hate them, hate them.

The Powerball jackpot is currently at at ridiculous heights. It has jumped twice since the last drawing on Wednesday night -- from $475 to $550 on Thursday, and then again up to $600 million by 1pm on Friday. I fully expect it to jump again before the drawing Saturday night.

Lotteries are interesting from a psychological/sociological experiment standpoint. At low jackpot levels, only regular gamblers and a few people saying "What the hell, why not?" buy tickets, so jackpots climb fairly slowly. But as they get higher, people seem to reach a mental tipping point where the potential gain outweighs the ridiculously terrible odds of actually winning. The first tipping point is somewhere between $100 and $150 million, but things don't really start getting nuts until around $200 to $250 million. In other words, the higher the jackpot, the more people buy tickets, so the faster it climbs, so the more people buy tickets, etcetera ad infinitum. (Or until someone finally wins, anyway.) It's a self-reinforcing cycle, aided by news organizations drumming up interest.

The frenzy brings hordes of people into the smoke shop, many of whom have no idea what they're doing and so eat our time in return for very little money, since lottery tickets have a profit margin of only 6%. (That means for every dollar we sell, we only get to keep 6 cents... or in other words, in order to earn a dollar, we have to sell $17 [okay, technically $16.67, but you can't sell 67 cents worth of lottery, so in real world terms it's $17].)

It's crazy and I hate it.

...

Nonetheless, I duly chipped in $2 for our workplace pool. We won't win, but I think of it as purchasing hope. *wry*

Comments

[branchandroot]

*shakes head* Man, that's the sort of think you can only dream of being completely automated, so they don't bother you about it. As much. *rueful*

[edenfalling]

People who come in and say, "I want $10 of Powerball" or "I want ten Powerball tickets" are fine. (Except in this particular case, if they just say, "I want ten on Powerball," I have to clarify whether they mean ten dollars or ten tickets, because Powerball went to $2 per ticket back in January 2012; this is not a problem with Mega Millions or the NY state lottery, which are both $1 per ticket.) It's the ones who want to choose their own numbers but have no idea how to do that who drive me bugfuck crazy. Especially since there are instructions on the backs of the lottery playslips where you fill in the numbers! Argh!

[monkey5s]

I was a "what the hell" lottery buyer in the past- I would buy a ticket or two at the filling station when I got gas in the car. A couple of years ago my personal finances fell apart, and yet I often still did buy a ticket when I got gas, because one or two dollars was giving me the fantasy daydream of being able to pay off my debts easily.

Now that my finances are more stable, I rarely bother with lottery- but I did feel like I might as well buy into the big multistate ones this weekend, since they were so big and I was there getting gas anyway. I won nothing on the Mega Millions, and I anticipate winning nothing on the Powerball tonight, but still, fantasy daydream, yanno?

I'm curious about one thing though. I knew that lottery was a low-return deal for the vendors, but do you get less from the multi-state ones? I don't remember what the arguments were against joining up when Ohio was contemplating it, but they've gone ahead and bought in anyway.

[edenfalling]

As far as I know, vendors get the same percentage no matter what kind of ticket we sell -- this goes for all types of instant scratch-offs as well as non-instant drawing games, whether in-state or multi-state. The financial tradeoffs are at the state level, since a winning jackpot would require most participating states to send money to some other state's lottery organization (which would then get to collect the relevant taxes, I think) rather than keeping it all in-state. On the other hand, multi-state lotteries get MUCH higher jackpots than single-state lotteries, so they bring more money in to start with. I am not sure how that balance plays out in practice, but I guess it must be close enough to profitable for the participating states to stay in the system.

[cherokee1.livejournal.com]

I also bought a ticket.
but then again, I buy scratch offs, and tend to participate in
the big draws. I have never won much with the drawings, but
I do win with the scratch offs.
Hope springs eternal.
C

[edenfalling]

I figure that people who buy lottery tickets for entertainment value (and keep to a budget rather than getting into grudge-matches against tickets) are probably okay. It's the people who buy lottery tickets with the serious expectation of earning money who worry me, since lotteries are designed to make money for the organizations running them, not lose money by handing out free prizes to all participants. :-/

[aishuu.livejournal.com]

My threshold is 100 mill per 1 dollar. (Ie - Megamillions goes 100 mill, I get, Powerball has to his $200 million).

I like buying the daydream, but recognize the lottery is a retrogressive tax on the stupid. I know people who believe the lottery is going to be their retirement plan... and how many people will pay for $20 of scratchoffs and then pull out a NY State benefits card? Infuriates me!

[edenfalling]

The lottery + benefits card is a problem I don't experience, since the smoke shop doesn't have the machinery to process ANY kind of cards -- not credit, not debit, not benefits, not anything -- but yeah, that would get to me.

It was explained to me once that on average, for every 100 dollars spent on scratch-offs, 60 goes back out as prizes, 6 goes to the vendor, and the remaining 34 dollars mostly go to system overhead (designing and printing tickets, shipping costs, building and maintaining terminals, programming costs, staff salaries, advertising, etc.) with whatever is left over going to the state education budget. And the leftovers aren't very much, all things considered.

I think the ratios are somewhat different for the non-instant games, aside from the 6% to the vendor, but the general principal that more money goes IN than comes back OUT as prizes still holds true. As a rule, lotteries are not a good investment strategy.

[lady_songsmith]

I buy during the big jackpots... and then again right after they're won, when no one's buying. I know the odds have nothing to do with how many play, but at least you're less likely to split the pot, right? :D

In my family, we say what you're actually buying is a week of daydreaming.

[edenfalling]

Hot tip! You are no more likely to win, but you are slightly less likely to split the pot if you get a computer-generated quick pick ticket instead of manually choosing your own numbers. This is because people fall into patterns when they pick numbers and therefore duplicate each other, whereas the computer has no such bias.

In New York, at least, your best odds for winning something are in the daily Take 5 drawing, which is a state game rather than an interstate one. The top prize varies depending on how many people bought tickets that day, but is generally between $50,000 and $100,000 (if unsplit). Matching four numbers gets you a few hundred dollars, three numbers gets you $15 to $35 (again, depending on how much money was spent and how many people won that prize level), and two numbers gets you a free ticket for a future drawing.

Frankly, I would rather win fifty thousand than fifty million. It is much less likely to negatively disrupt my life. *wry*

[explodingfrogs.livejournal.com]

Hope is an extremely valuable treasure, and something that everyone should have in their hearts.

...As long as it's not the "beam of coherent destruction issuing from a Wand of White Science" kind of hope, anyway.

But anyway! Hopefully things will calm down soon.

[edenfalling]

Ahahaha, somebody should totally write an "Eridan wins the lottery" story -- his victory would be the destruction of everyone else's hope. :-)

(There was one winning ticket, purchased in Florida -- and somebody also won the Mega Millions jackpot on Friday night -- so things are back to normal again, thank goodness.)