Do you often pass up the opportunity of winning a $10 million lottery jackpot all because you think it will be better to invest your $2 on a bigger lottery jackpot?
So you play the lottery to win. To you, winning means absolutely considering all things relative to playing the lottery with minimal risks. Including knowing a lottery ticket’s expected value.
Now what exactly is the ‘expected value’ all about and how can it lead you to making quality decisions with regard to playing the lottery?
The expected value can be considered as the average of all the values obtained after running a probability experiment over a number of times while keeping track of the results.
In the case of a lottery game, the expected value can be obtained after considering the amount of the lottery jackpot and the probability of winning that jackpot.
Here’s how an article from Business Insider put it, “If my expected value for playing the game, based on the cost of playing and the probabilities of winning different prizes, is positive, then in the long run the game will make me money.”
For example, if the US Powerball were to raise a $600 million jackpot, considering that the odds of winning are 1 in 292,201,338, the expected value of a Powerball ticket is $2.05 – which was attained by dividing the amount of the jackpot by the odds of winning the said jackpot.
Now, bear in mind that the usual price of a lottery game is $2. Once the expected value reaches $2.05, playing the Powerball when it raises a $600 million jackpot can be considered as a fair game.
So we can say that once a lottery jackpot gets bigger, the expected value, in return, gets better as well.
Meaning, you get more money back, potentially.
But why shouldn’t you wait for the lottery jackpot prize to get bigger before you play?
Being mindful of the ticket’s expected value might be the best thing you do before you play in a draw. However, letting the expected value stop you from playing the lottery might not be a wise move – more like crazy!
Well, first of all, think of all the draws you’re bound to miss before a lottery jackpot hits a price that you consider tasteful. Sit and ponder about how the expected value will really affect your chances of winning. The truth is the odds will never change. No matter how big the lottery jackpot and the expected value fluctuate.
Once the expected value of a lottery ticket raises high, the odds will remain as is. If it was 1 in 292m, it will stay 1 in 292m.
Now, you must be wondering why other people play in accordance to a lottery ticket’s value. The reason for that is these people are planning on buying a good percentage of the ticket.
You see, the expected value can be applied to guarantee that you will not lose more than you play. This is why once the jackpot grows to a fair amount of millions, you can expect it to attract every syndicate in town.
What Syndicates Have To Do With It
Speaking of syndicates, one more thing to consider when playing the lottery in accordance to how high the expected value is that there’s a good chance you’re going to be sharing the winnings with someone else.
So if you’re thinking of putting off playing the lottery unless the jackpot is at least $20 million, don’t. Bearing in mind the amount of people the lottery jackpot attracted. You might not be the only one playing the winning numbers.
So think about it. If you were to produce the winning combination for the $20 million jackpot, there’s a good chance you’ll share it with another winner. And that will leave you with $10 million – or less if there were three of you. So wouldn’t waiting for the jackpot to grow to $20 million pointless now? Especially if you could have played it when it was just $10 million and have it all to yourself?
Take a look at why Time.com agrees, “there are three major things winners have to contend with—taxes, the lump sum discount, and potentially splitting the pot with other people. We have to contend with the possibility of multiple winners with and a split pot, which gets more and more likely as more tickets get sold.”
And there’s nothing you can do with $20 million that you can’t with $10 million anyway!
So what should you do now?
Only consider the expected value if you’re planning on purchasing, say, about 80% of the tickets. But, even then, you should anticipate the possibility of sharing the jackpot with another winner.
So, the next time you see a jackpot; don’t simply pass up the opportunity to win it because it’s not big enough. Keep in mind that people don’t just play with big jackpots because of the expected value of a ticket. Sometimes people play with big jackpots simply because they want to win a big pile of money.
Now, don’t be discouraged. There are other ways you can increase your odds of winning a big pile of money. It doesn’t even concern calculating the expected value at all. In fact, you don’t need to calculate anything to improve your odds of winning.
For example, did you know that it’s completely possible to analyze lottery draws? You can also check the recurrence interval of each combination.
The recurrence interval can help you choose patterns that have a good likelihood of appearing in a future draw. In addition, knowing the recurrence interval of these patterns can help you play your numbers at the right time.
You can shrug off the idea of a game’s expected value. Focus on ways to improve your odds that doesn’t involve complicated calculations on your part. All you have to do is Sign Up, and you can leave the rest to us.