It says that the state made money on this, too… though I don’t quite understand how.
The state takes $0.40 of every ticket bought off the top. The betting pools bought tickets above and beyond what the “regular” customers would buy when the jackpot was getting close to $2 million dollars. These are tickets the lottery would not have sold otherwise more than likely. (The kind of people who buy massive amounts of tickets when they actually have an edge in the odds are also the kind of people who buy NO tickets when they do not have an edge.)
Clearly someone had to lose money.
Deciding which is the sensible counterfactual is always tricky, and a conclusion can be switched 180° by choosing a different counterfactual. Carpe paribus, baby!
The most reasonable counterfactual I can come up with is as follows.
First the factual, what actually happend
1) There were the usual lottery ticket buyers who bought lottery tickets when the odds were against them. During these times, the jackpot was built up over time to close to $2 million. 2) There was a second group of people who know math, know how to use it, and aren’t afraid to bet they are numerate. They brought in a lot of money to buy additional tickets when they believed (correctly in virtually every case) that the jackpot would go over $2million and the average payout on tickets would exceed their cost (typically by about 15% when it happened).
The counterfactual would be that somehow the numerate were prevented from buying many tickets, but otherwise the lottery stayed the same. In this case we would see
1) Less revenue to the state as fewer overall tickets are sold
2) Less prize money paid out overall as less money was paid in to buy tickets
3) But somewhat higher average payout to the innumerate who buy a steady-ish stream of tickets in times of good odds and bad, since all the jackpot would be split between the innumerate in the absence of the numerate big bettors.
The state takes $0.40 of every ticket bought off the top. The betting pools bought tickets above and beyond what the “regular” customers would buy when the jackpot was getting close to $2 million dollars. These are tickets the lottery would not have sold otherwise more than likely. (The kind of people who buy massive amounts of tickets when they actually have an edge in the odds are also the kind of people who buy NO tickets when they do not have an edge.)
Deciding which is the sensible counterfactual is always tricky, and a conclusion can be switched 180° by choosing a different counterfactual. Carpe paribus, baby!
The most reasonable counterfactual I can come up with is as follows.
First the factual, what actually happend 1) There were the usual lottery ticket buyers who bought lottery tickets when the odds were against them. During these times, the jackpot was built up over time to close to $2 million.
2) There was a second group of people who know math, know how to use it, and aren’t afraid to bet they are numerate. They brought in a lot of money to buy additional tickets when they believed (correctly in virtually every case) that the jackpot would go over $2million and the average payout on tickets would exceed their cost (typically by about 15% when it happened).
The counterfactual would be that somehow the numerate were prevented from buying many tickets, but otherwise the lottery stayed the same. In this case we would see 1) Less revenue to the state as fewer overall tickets are sold 2) Less prize money paid out overall as less money was paid in to buy tickets 3) But somewhat higher average payout to the innumerate who buy a steady-ish stream of tickets in times of good odds and bad, since all the jackpot would be split between the innumerate in the absence of the numerate big bettors.