Analysis, discussion and opinions by members of Newsday's editorial board.
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Filler: Buy a Mega Millions ticket, it's not such a bad investment
What if I were to tell you that tonight’s Mega Millions drawing, besides being a great fantasy investment at $1 a ticket (most of my fantasies have cost quite a bit more) is also, in one mathematical way of looking at it, a darn strong mathematical investment.
The drawing is at 11 this evening, and the odds of winning are about 258 million to one: in other words, you have a better chance of being propositioned by Pink at the exact same moment you are hit by a meteor than you do of cashing the big ticket. Your odds may differ slightly, if you are more attractive to pop stars than usual, or less attractive to meteors.
I buy tickets whenever the jackpot gets big, because I think it’s a great investment, for entertainment. For $1 I can get a ticket, and thus a license to daydream for several days about everything I’d do if I won. Admittedly, I actually spent $113, but I COULD have purchased my fantasizing rights for $1.
And in this fairly unusual case, because the jackpot has rolled over 21 times since Oct. 4 without being won, you can also argue that the tickets are a sound, even savvy investment. Not all lottery jackpots are created equal.
In general, lotteries keep 50 percent of money wagered and pay out the other 50 percent, just as Fat Louie the Numbers Runner did before the state-run rackets put him out of business. But some drawings return far more than 50 cents on the dollar, and others far less.
When you have the first drawing of a new Mega Millions jackpot, after someone wins the previous jackpot, the prize is set at $15 million. If you buy one ticket you are wagering $1 at odds of 258 million to one to win $15 million, the cash value of which, after taxes, will be about $5 million. In this scenarios, if you did it an infinite number of times, you would in the long run lose about 98 cents of every dollar.
But as the pots climbs to $30 million, or $100 million, or $500 million, your expectation of value improves, because you have a chance to win “dead money,” money that no longer represents active tickets in the drawing.
And if the pot gets big enough, your expectation of value goes over 100 percent. In theory, given a big enough jackpot and again, infinite time and resources, you would end up ahead buying tickets in such drawings.
How high, exactly, the pool has to be, is an issue mathematicians squabble about quite a bit. Further complicating the equations: because gambling expenses are tax-deductible, but only against gambling winnings, your tickets are actually 30 or 40 percent cheaper on an absolute basis if you win than if you lose, and in every case you have to model the possibility that you’ll have the right numbers, but so will someone else, or several someone elses'.
In this case, most mathematicians would agree the pool is either high enough to present a good bet (for just a few bucks), or very close to it.
So enjoy yourself. Imagine quitting your job in some ugly, ferociously anti-social way that eventually involves cops and psychiatrists(not me, boss, I love what I do).
I bought my tickets in league with a family member and colleagues this time, which is okay. I guess. Sometimes it seems like it would be a lot more fun to win if everybody else I loved and worked with didn’t, because my joy would be amplified by their continuing misery. And they’d have to beg me for things.
But if the win comes, I’ll take it anyway. And if not, I at least got to have the daydreams.