Tuesday, July 21, 2009

Lottery Switch

Let's see... I play poker (badly), craps (not so badly), and slots (far too well to be comfortable with it). I also, on occasion, drop a couple bucks on the lottery.

A sucker's game? Sure. Remember how I said I play the slots too? Shut up.

Canadian lotteries suck a little bit. I think the biggest prize ever was around $54 million. Compared to the hundreds of millions in the US multi-state lotteries, this looks like chump change.

Except we get to keep it all. No taxes on it. No annuity payouts. Just, "here's your cheque for $54 million sir." So there's that going for it.

There are two major lotteries. 6/49 and Super 7. Super 7 being a "choose 7 of 47" lotto.

6/49 is $2 for 1 pick of 6. Super 7 is $2 for 1 pick of 7 + 2 quick pick lines, for 3 sets of numbers total.

6/49 odds? 1:13.9 million
Super 7 odds? 1:20.9 million

Meaning that anything under $27.8 million in 6/49 isn't really mathematically worth it if you think only of the jackpot. Super 7 has a higher goal of $41.8 million, which it seldom reaches.

Still better odds than Powerball.

But the lottery corp is dropping Super 7 for something called Lotto Max, which sounds like a terrible name that was invented so it wouldn't have to be translated into French.

It smells even more scammy than most lotteries.

$5 per play. 3 set of numbers. 7/49. That would be 1:28.6 million odds.

Or a $143 million EV to be worthwhile.

Jackpots start at $10 million. And continue to rise until won or hitting $50 million. At $50 million, they start a series of secondary prizes of $1 million each, with seperate draws and winners. It's not clear if they keep rolling unwon money into the next week's total jackpot, or if there's a $50 million cap.

If there's a cap, then it will NEVER be worth the $5.

Plus, $5 doesn't strike me as a good number. People complained when 6/49 went up to $2 from $1, even though they increased the jackpots accordingly. People don't mind dropping a $2 coin on the counter for a lotter ticket. A $5 bill has a different attachment, and in these times, it's pretty strong for the prime lottery players.

The desperate, the retired savers, the spur-of-the-moment buyers, the "we play the same numbers every week" groups - that's a 150% increase in cost to them. The groups at work that pool their toonies together? They just cut the number of tickets they'll buy to keep the cost the same.

So the potential is there that the odds, which are worse, never line up for proper EV, the cost is higher, and the payouts are more confusing.

I think we have a loser of a game on our hands here folks. Layering bonuses and confusing extras on a game only works when people think it's affordable. The grandmas pushing "max bet" on the penny slots don't realize they're spending the same as me pushing "max bet" on the $1 slots. But they think they're only paying pennies, and winning dollars. I know how much I'm flushing down the drain.

A $5 lottery that nobody really understands the payouts of? I expect a boost in 6/49 sales.


Schaubs said...

Thanks for the info. Glad I read this one, I'll be sticking to the 6/49.

Schaubs said...


Not sure if you heard about the latest winner or not, but the person that won $25M from BC is a cousin of a guy that works here with me.

Now I can say I am 2 degrees from a winner!

Thought you should know as I remembered this post when I heard the news.