How the Lotto jackpot value is calculated

The Lotto Jackpot for this saturday is 17 Million . I have seen Lotto Jackpot like 4, 5 , 9, 12 or 13 Million but never a 2 , 3, 6 or 10 Million .
When a Jackpot is not cracked ( first time), it always moves to 4 million and then to 5 Million .
Makes me wonder how the Jackpot is calculated ?

What about this then? NKL-Jackpot wächst auf 6 Millionen!

That is NKL. I think it is a private lottery. What i meant is the Lotto Jackpot, which is run by the State.

Best not to play the lottery. It's a tax on the poor.

Or seen another way: it's an idiot tax. When you win ten bucks, you get an idiot tax refund.

The lottery is a tax on those who don't understand statistics. Even though the odds in a 6/49 game are about 13.2 million to one and the jackpot is sitting somewhere around €17M, you have to also get the SuperZahl, adding 1 in 10 odds to the game. If two games cost €1 then mathematically it doesn't make sense to play before the jackpot's worth around €70 million, although with the lower prizes, it starts making statistical sense once the jackpot's reaches around 40 million.

woof.

Wait up a minite - lottery is a tax on the poor? Or idiots?

Stats are racked against you, sure, and I don't play the lottery, but the last time I checked, I have a 0% chance of ever winning anything atall on the whacker taxes this socialist craphole charges me.

No tax on lottery winnings in Germany.

Lotteries aim a large part of their marketing at the poor with a bunch of dream-building adverts. It was so blatant in Ohio about 12 years ago that the Attorney General went after the State Lottery Board which would run major ads in the three-day window when monthly unemployment and Social Security checks were distributed. Additionally, something like 50% of all public print ads (billboards, leaflets, etc.) were distributed in the poor sections of towns.

woof.

Ummm... so why aren't you voting with your feet then?

Oooh, well done, your brain has managed to rephrase the immortal bullshit TT crapline" if you don't like it, why are you here?". PM Keydeck and ask him how to use the search function.

Tell that to the guy that recently won 36 million, or anyone that has won the Jackpot before. Yes, statistically there is a very, very low chance of winning, and the game is a rip off for sure, as are almost all forms of betting. None the less, some one eventually ends up winning, and if you're not in it, you can't win it..

That's precisely the argument they push to keep the money rolling in. So they line up to pay what amounts to a voluntary tax to the government. The rewards are intermittent - nothing more addictive than that - and the big payoff unlikely. Nevertheless they'd rather throw their money away on the lottery than channeling their money and dreams into an investment in themselves, such as going back to school, getting a better trade, working toward something real instead of an illusion of riches.

Right. The fact that some asswipe made off with a €36M jackpot doesn't mean shit except that ONE person (out of more than 80 million) got very lucky. Statistically, anyone buying a lottery ticket before the jackpot hits €170M or so is a fucking idiot. It's such dreams that the lottery sells to get people to keep playing. HALF the money doesn't go to payoffs but to the earmarked programs. 19% goes to taxes (which is why winnings aren't taxed). Then there are administration costs of at least 10%. That leaves less than a quarter of the money paid in which actually gets redistributed. Lotteries are a scam.

woof.

Oh, so when the amount you can win changes, you're suddenly not an idiot for betting on a 20 million to one chance? That's ridiculous.. What's the difference between 17 million and 170 million? You'd still be fecking rich as..


All gambling is a scam, and mathematically stupid. People are doing it to have a punt, not to make an investment..

If the payout is higher than the odds, it becomes -- mathematically -- a smart risk.

I'll illustrate with coin tosses. There's a 50-50 chance a euro comes up heads... erm... well, it's a "1" but we'll call it "heads". That means there's there's a 1 in 2 chance in any gambling game based on it. Let's say there's a simple casino game called CoinFlip. You bet a euro for each flip of the coin. If you're right, you get €2 back and if you're wrong, you lose the euro. The payout here is 2:1 which is exactly the inverse of the odds against. This is a zero-sum game and statistically speaking, you'll neither win nor lose in the long run. Play it long enough and you'll end up with what you started off with and you've just killed some time.

Now if the payoff changes and you get €2.50 for calling it right, the payoff is higher than the odds (3:2 for 1:2) and in the long term, you will come out ahead and gain money. Conversely, if the payoff is only €1.95 for a win, you will slowly lose your money, on average 5 cents every two flips. This is the essence of gambling. Baccarat is little more than a coin flip, but the house skims 10% of the money.

Let's change the game. Now it's two flips per game. If both flips come up heads or both come up tails, you win. If they're mixed, you lose.

First, a word about probability: No coin toss influences any other toss of the coin. Even if you've thrown 20 heads in a row, the odds that the next coin toss will be heads is still 1:2. The likelihood of 21 heads in a row is around one in two million. This means that if you tossed a coin two million times and kept track of the results, you shouldn't be surprised to find a run of 21 heads somewhere in there, but there's no guarantee that it must happen. This is where most people are tripped up. Humans see patterns even where no pattern exists. Random events are hard for our monkey brains to deal with and pattern-seeking is an evolutionary trick, something which saves us more often than it hurts us.

Back to the game. The odds of throwing two heads are 1:4 and the odds of throwing two tails are the same; the odds of getting either 2 heads or 2 tails is 1:2. The odds of throwing a mix are 1:2. As long as you're getting a payoff of 2:1 and your odds are 1:2, this is a zero-sum game and the only reason not to play is that you have something better to do. Now if we tweak the game slightly and say you only get paid off if 2 heads are thrown, would you play if the payoff changed from 2:1 to 3:1? Hell no, because the odds are 1:4; you'd lose 1/3 of the money you bet over the long run.

Have a look at the Pick-3 lotteries which most US states now have. The odds of getting all three numbers in order are 1:1000 but the payoff is only 500:1. Every casino in the world would love to be allowed to pay out so poorly but state regulations don't allow them to take more than 17% (slot machines). Pick-3 is a sucker's bet. Most people don't mind because the 50% that the state skims is put to use for things which would otherwise require higher taxes. The tax would be fairer because it's the mathematically inept who spend the lion's share on lottery tickets. (State lotteries are even worse than this; they pay out "500 for 1" rather than "500 to 1"; you don't get your initial bet back, so the payout is actually only 49%!)

Now if the state upped the Pick-3 payout from 500:1 to 1200:1, I'd be playing like a madman since I can expect a 20% increase in the money that I gambled over the long term.

But what's the long term? One hundred draws? A thousand? This is the second layer of complexity in dealing with random numbers and probability theory. The casino is there for the long haul; you will never play enough of any one game continuously to see the actual odds materialise unless you go to a nickel slot with a million dollars. After playing 20 million rounds, you can expect to have about $830,000 left.

That's the simplification. The Lotto here is no different: shit payoff based on the odds. SOMEone is going to win sooner or later because of the numbers of people playing, but the odds that any one ticket will win the super jackpot are about 1:170million ("6 of 49" plus "1 in 10"), meaning mathematically it doesn't pay to play until the payout is at least 170,000,000:1, or ~€85 million since you get two chances for a €1 ticket. If the jackpot is over €85 million, then for every euro I risk, I stand to gain more than a euro.

Such a huge jackpot almost never builds up because of a lot of other complex theory, but it has happened a few times, most recently last year with the Powerball lottery in the US, where the jackpot was up to something like $200 million.

I could go further into this, pointing out that the "€85 million jackpot" isn't really €85 million but a 25-year amortised pay-out, and money loses approximately half its value every 10 years (i.e., prices tend to double in that period). But I think I've written enough here.


That's why there are no professional gamblers, right? Yes, gambling can be a mug's game, but those who understand the odds and how they can be affected can win. There are only two casino games I play: blackjack and craps. Blackjack has the lowest standard house advantage of all casino games, and rounds are not independent of each other, except in the case of the first hand after a shuffle. This is why there are card counters. The odds change as cards are dealt out. Likewise, in craps, although each roll of the dice is independent of the previous roll, the bets on the table are not. If you don't understand how craps works (and it's very complex), you can lose a lot of money very quickly, but if you understand the game, the probabilities and statistics, and are patient willing to take the very slow but less risky path -- you can earn a lot of money. I've made more than $400 in 15 minutes and never lost more than $100 in an hour on $5 craps tables.

Sadly, they don't have craps over here in Yerp. Next time I'm in the US I'm visiting my aunt in Philly. She has a place in Atlantic City and we'll be going there, which means at some point, I'll be at a casino, taking their booze and probably some of their money.

woof.

I can't believe you wrote so much over such a trivial thing.. look, people know the odds are low, and they know they are probably going to lose but they want to be in there with a chance.. this does not make them "fucking idiots".. that is my point here.. they are not doing it as an investment, they are doing it for fun..

That is where you ae wrong Hutcho. Many many poor people see the lottery as the only way out of their circumstances. They think that playing ten dollars a week is not that much, but if they were to have invested this amount throughout their life rather than hoping for that 1 in 300 million chance, they might have a better retirement package saved up.

Ok, in which case, these particular people are "fucking idiots".. but sometimes I might play the lotto just for a chance to be in it, and I resent being called a "fucking idiot" for doing so..

This is precisely my point. Why pay taxes when you don't have to? Why not save your money and use it to buy something useful? Why not channel the energy you spend dreaming of getting something for nothing and use it toward something more valuable? I dunno, just makes sense to me. I got called a CSU supporter yesterday evening for suggesting this.

Sorry, but looking at it purely on a mathematical basis, you are. What would you call someone throwing his money away? If every man, woman and child in this country were given two lottery tickets and every single one of them had different numbers, there'd still be a 1 in 16 chance that no one hit the jackpot. Furthermore, the game's not zero-sum. The government collects VAT on the ticket sales, so there's almost a fifth of the money gone. Then there's administration and taxes and earmarked funds. Only half the collected money goes to payouts, only half of that to the jackpot, and there's only a 1 in 170 million chance of collecting. How many times would you be willing to play the game "Pick a Number Between 1 and 170,000,000" (at 50 cents a shot) before giving up in disgust? Because in essence, that's what you're doing.

I didn't say "you're a fucking idiot for playing the lottery", I said "statistically speaking, you're a fucking idiot" because your chances of winning are so infinitesimally small and the payout is nowhere near the risk. I understand the motivation but I also understand the maths behind it (as well as a bit of the psychology).

woof.

[img]http://www.flughafen-fmo.de/images/ausreise.jpg[/img]

Considering that what he says indicates he isn't happy to be living here, it's a legitimate response. Sure I could have used the search function and found a bazillion threads about this one, but that's not where he posted.

The value of a lottery ticket is the value of all the prizes multiplied by the odds of winning each prize (p1*o1 + p2*o2 + p3*o3…), taking into account that the largest jackpots can also be shared amongst multiple winners.

Consider if you would buy a €1 lottery ticket if it was clearly marked as having an actual value* of only €0.25, the difference in price consisting of nothing more than hope and marketing bullshit.

*Under favourable playing conditions

You say "the payout is nowhere near the risk", but the risk depends on the individual and how much money they have to spare. If someone desperately needs a large sum of cash, and stakes their last 100 Euros on lottery tickets in the hope of winning the jackpot, then they are indeed taking an insanely huge risk.

I started playing lottery a few years ago, when I figured out that in order to live in the style to which I want to become accustomed, I will need at least 10 million Euros in the bank. I am never going to save up that amount on my present salary, and I'm not enough of a financial genius to accumulate it through investments. So the lottery is my only chance. A small one, admittedly, but still infinitely larger than no chance at all. Counting the occasional small winning you get if you play regularly, I reckon it costs me about 20 Euros a week. That's an amount I can afford to spend without making a noticeable dent in my standard of living. I am not addicted to gambling. I can't even be bothered to check the winning numbers each week. I just go along to the gambling den when my 5-week ticket expires, to see what I've won. I also understand the maths behind it (or I could, if I could be bothered to read all the stuff BadDoggie wrote). As for the psychology - well, some people play because they're desperate for the money, some because they're addicted, some because they're superstitious and believe they have luck on their side. I'm none of those things. For me, it's just a bit of fun, and I'm buying myself the chance to daydream.

What was that DeNiro line from Casino... "Selling dreams for cash"? I think that sums it up pretty good. Stats are all fine and dandy, but not the whole story here.

jeesh, german lotto is pretty skimpy. when I was last in the usa, they have a multiple state lottery called powerball or some derivation: its common for it to get up to 100, 150 million us$'s.