There are loons out there who think you can win Lotto.
Thomas Lumley at Stats Chat blog explains the math of those claims.
That is, how to gamble in a way that over a course of a year, gives you a higher chance at a larger payout than playing NZ Lotto each week and hoping for Division 1.We all knowÂ you canât âbeat Lottoâ in the usual sense of improving your odds of winning.
In the ordinary Saturday Lotto, you pick 6 numbers out of 40, and if all 6 are correct (which they arenât) you win $1 million.Â The chance of winning is 1 inÂ 3838380 per âlineâ. Suppose you play the minimum of 4 lines, for $6, each week for a year. The chance of winning in a year is one inÂ 18453.75. That is, on average youâd expect to win once in every 18453 years and 9 months.
Right so not much chance at all then.
Alternatively, suppose you save up the $6 per week, and then at the end of the year go to a casino and play roulette. Â Put it all on a single number. Â If you win, put it all on a single number again, and then if you win, Â put it all on a âdouble streetâ of six numbers. Â Your chance of winning (in double-zero roulette) is 1 in 9145.33, and if you win you will make $2426112.
So, you get twice the chance of winning as you would have for Lotto division 1, and more than twice the payout.Â The expected return is 85%, much better than the 56% that NZ Lotteries returns (averaged over all its games,Â annual report).
Wow…off to the casino for me…buy perhaps I should read the rest of the post…
Does that mean itâs a good idea? No. Not even slightly. Â You have a 37 in 38 chance of turning up with $300 and losing it in a few minutes. If you donât, you have a 37 in 38 chance of losing $7500 in the next few minutes, and if you donât, you have about an 85% chance of losing more than quarter of a million dollars. Â This strategy makes your losses obvious, which makes gambling no fun. And you still only win once every 91 centuries.
Bummer…so that doesn’t work either.
Enjoyable gambling, including Lotto, is based on making your losses less obvious by masking them with small wins and stretching them out over time. Of course, thatâs also what makes gambling, including Lotto,Â potentially addictive.
Essentially gambling is a tax on stupidity…the more stupid you are the higher the tax.