NY megamillions jackpot: it is rational to buy a lottery ticket today (3/22)?

gattis recommended this 2 hours, 34 minutes ago

The expected value of a ticket has gone above the price for tonight’s drawing. Depending on your risk profile, it may be actually be rational to buy a 

ticket.

9

gattis

gattis commented 2 hours, 31 minutes ago

To spread the risk variance we started an office pool with 40 tickets so far. Take a phone picture of your ticket(s) with a signature and email it to winners@mit.edu if you agree to join the pool.

gattis

gattis commented 2 hours, 28 minutes ago

And do so before the drawing at 11pm… you don’t want to be the only one who’s not filthy rich!

hugo

hugo commented 2 hours, 20 minutes ago

i wonder if anyone has ever before flashmobbed the jackpot to game it?

gattis

gattis commented 2 hours, 15 minutes ago

You can but the more people you add, the smaller the variance is, and the closer you’re likely to get to the 11% or whatever return. Some guy at MIT actually did this and made a successful hedge fund for the MA progressive jackpot.

hugo

hugo commented 2 hours, 4 minutes ago

@gattis LOL

chris

you commented 1 hour, 1 minute ago

on twitter someone made the good point: @cdixon Not post-lump sum, post-tax. Last time I tried to do the math, I ended up at a $561 million jackpot or something.

gattis

gattis commented 6 minutes ago

The cash option for the jackpot is $155.7M and the chances for a jackpot are 1/175.7M, plus there are a bunch of other prizes (1/4M for $250K, etc). If you multiply the cash values by the probabilities you get about $1.07 as the value of the ticket. Your losses are also tax deductible so that offsets the tax penalty for winning depending on your income bracket.

gattis

gattis commented 4 minutes ago

Real unknown is how many people will play and split the jackpot, but historically it has averaged out to about 1

gattis

gattis commented 2 minutes ago

Plus if you invest you can get a much greater % return on $156M than you can on $1. Rich get richer.

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4 thoughts on “NY megamillions jackpot: it is rational to buy a lottery ticket today (3/22)?

  1. Jeff Pester says:

    Do you a signature on the front of the ticket or shots of both front and back (signed)?

  2. Jeff Pester says:

    I’m assuming everyone who is in the pool will be emailed a list of all the number sets submitted prior to the drawing tonight correct?

  3. Matt Gattis says:

    @Jeff Just sign the front somewhere and send a clear pic of the front with the numbers you are adding to the pool. I hadn’t planned on emailing everyone back but it’s actually a mailing list with more than 10 people on it to keep it in check. If we win anything, the total will be split amongst the winners, weighted by the number of tickets you added to the pool.

  4. kennethrluna says:

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