Even with compute power available, the “value” part of EV calculations gets weird outside of the bounds of normal experience. Very small probabilities are susceptible to estimation error, and very large impacts are susceptible to value error.
For the lottery specifically, for most non-impoverished people, the ranges of reasonable estimates are such that it’s rationally justifiable to play or not play, depending on your enjoyment of the act rather than the monetary EV. The actual monetary EV is only a guess anyway—given that more tickets get sold when it’s large, the chance of splitting the win goes up, and that’s ignoring the chance of errors, cheating, or other shenanigans. Add to that the fact that you don’t know how it changes your life and relationships to win—it’s probably quite positive, but it’s impossible to predict how much.
It was popular in the 90s among positive-ev gambling folks (card counters and the like) to search the world for +EV lotteries and pool funds to buy LOTS of non-overlapping tickets. True opportunities were somewhat scarce, and usually the smaller ones, not the giant jackpots.
I made some profit in card counting and poker, and made friends with some of the pros—there were definitely profitable teams and syndicates, and part of their profits was in identifying broken games and exploiting them until fixed. I had a decent job at the time, and didn’t really want to commit that much energy to it, so I remained a hobbyist and hanger-on.
I knew about a number of progressive slot jackpots that were +EV for periods of time, a bunch of promo or just miscalculated bonus bets at small casinos, suspiciously-generous Keno payouts, and the like. There was talk of large government lotteries that were exploitable, mostly in too-much-payout to near-misses, but I don’t know of any actual big hits. There were a lot of smaller wins, and perhaps a dozen of my close acquaintances were making a good living at this (and probably 10x that many supplementing a regular job, and I’m sure 100x that many not doing that well but claiming they were).
… you don’t know how it changes your life and relationships to win—it’s probably quite positive …
I seem to remember reading that the overall impact to an individual of winning a large lottery is very frequently overwhelmingly negative; that nearly everybody winning those prizes ends up worse off five or ten years down the road than they were when they started.
… a 5-minute check of the easiest-to-find articles on the subject provides mixed opinions, so grain of salt and all that. But I didn’t see any anybody claiming that winning a lottery is all champagne and rainbows. Rather, most sources seem to be advising a great deal of caution and professional assistance to keep horrible consequences to a minimum.
Even with compute power available, the “value” part of EV calculations gets weird outside of the bounds of normal experience. Very small probabilities are susceptible to estimation error, and very large impacts are susceptible to value error.
For the lottery specifically, for most non-impoverished people, the ranges of reasonable estimates are such that it’s rationally justifiable to play or not play, depending on your enjoyment of the act rather than the monetary EV. The actual monetary EV is only a guess anyway—given that more tickets get sold when it’s large, the chance of splitting the win goes up, and that’s ignoring the chance of errors, cheating, or other shenanigans. Add to that the fact that you don’t know how it changes your life and relationships to win—it’s probably quite positive, but it’s impossible to predict how much.
It was popular in the 90s among positive-ev gambling folks (card counters and the like) to search the world for +EV lotteries and pool funds to buy LOTS of non-overlapping tickets. True opportunities were somewhat scarce, and usually the smaller ones, not the giant jackpots.
Just curious, we’re the ones found profitable to your knowledge?
I made some profit in card counting and poker, and made friends with some of the pros—there were definitely profitable teams and syndicates, and part of their profits was in identifying broken games and exploiting them until fixed. I had a decent job at the time, and didn’t really want to commit that much energy to it, so I remained a hobbyist and hanger-on.
I knew about a number of progressive slot jackpots that were +EV for periods of time, a bunch of promo or just miscalculated bonus bets at small casinos, suspiciously-generous Keno payouts, and the like. There was talk of large government lotteries that were exploitable, mostly in too-much-payout to near-misses, but I don’t know of any actual big hits. There were a lot of smaller wins, and perhaps a dozen of my close acquaintances were making a good living at this (and probably 10x that many supplementing a regular job, and I’m sure 100x that many not doing that well but claiming they were).
I seem to remember reading that the overall impact to an individual of winning a large lottery is very frequently overwhelmingly negative; that nearly everybody winning those prizes ends up worse off five or ten years down the road than they were when they started.
… a 5-minute check of the easiest-to-find articles on the subject provides mixed opinions, so grain of salt and all that. But I didn’t see any anybody claiming that winning a lottery is all champagne and rainbows. Rather, most sources seem to be advising a great deal of caution and professional assistance to keep horrible consequences to a minimum.