Are Scratch Offs Worth It
Observation: Popularity of scratch-off lottery tickets remains high despite their low odds of winning. The attraction of exponentially increasing an “investment” of $1 with no skill involved draws people to these games.
Hypotheses: If a $1 scratch-off lottery game is played 100 times, the player is likely to lose money in the end. Most people playing the game will eventually lose money, only a few will gain.
- Becoming a multi-millionaire off a lottery scratch ticket. A recent winner in Texas is proof. The big win is the first of four top prizes worth $3 million to be claimed in the.
- You go ahead and scratch off the cards. Maybe you can give one batch to your lottery ticket specialist. After you've scratched them off, you should have a pretty solid sense for whether or not.
- A Pint of Milk Worth a Million. The final story comes from the IK where yet another man won the top prize a scratch card lottery can produce – one million pounds. In the summer of 2017, the 69-year-old Bill Bett saw 1MIL appear on his ticket after scathing it off. Bill believed that he had won one pint of milk.
- One lucky Idaho woman hit a pair of six-figure jackpots worth a combined $500,000 — on scratch-offs she’d bought two days in a row. Orlene Peterson’s first winning ticket — a cool $200,000.
Variations: A player can potentially win a large sum of money on the first play with some “luck” on their side.
Experiment: 100 Texas Lottery scratch-off “Amazing 8’s” games costing $1 each will be purchased. 20 games will be purchased from 5 separate establishments. Amazing 8’s have odds of 1 in 4.65 games at least break even.
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Step 1
Scratch Off Ticket Secrets The Lottery Doesn't Want You To Know!!!Hello everyone, in this video I play $30 and $20 Missouri lottery scratch off tickets, t.
I was thinking of buying a roll of scratch-offs, but I wanted to randomize the process, so instead I bought 20 Amazing 8’s from each of these five establishments: Albertson’s, Chevron, Diamond Shamrock and Exxon. I withdrew $100 from an ATM to make all of my purchases, so after tax I spent a flat $100 on scratch offs. The whole process took me an hour as some places I visited did not have Amazing 8’s.
Step 2
Counted and verified that I had exactly 100 Amazing 8’s scratch-off lottery tickets.
Step 3
Got my trusty tools ready: Two quarters. One is an American quarter and the other is a Canadian Quarter. I’ve found that Canadian quarters are much better for scratching mass amounts of lotto tickets!
Step 4
Start scratching! I would scratch and scratch until I found a winner, which would then be placed inside the “Winner$” basket.
Scratching 100 lottery tickets is NOT as exciting as I thought. It felt more like a boring job. Next time I do gambling experiments, I’m goin’ ta Vagas.
Winner$ basket starting to fill up with $1 and $2 wins.
The real gem of the lot was this ticket which won $60! The chances of getting this are 1 in 1,500.
Step 5
Tabulate each amount won.
Losers were placed on the table, and the proud winners were put higher up on the stool (Just for a more dramatic metaphorical effect)
Step 6
Report the totals. I came out ahead with $102! A 2% return.
The proud winners in all their glory, especially our champion: Mr. $60!
After the experiment was completed, I went to the grocery store to cash in my $102. I then proceeded to the Bank of America ATM and deposited the cash directly back into my investment account. So I performed this experiment and MADE $2 and learned a little too!
Step 7
Conclusion. This “investment” of $100 was more of an experiment and should not be used as investment advice. Anyone who invests their money in the lottery for purposes other than mild thrills and entertainment is (according to the odds) just dreaming. The odds prove that if you play long enough, you will lose 75% or more of your money. Of course you can also win a lot of money, but it’s highly doubtful. I just happened to buy the right tickets at the right time for this particular experiment, but if I repeated the experiment again, I would most likely not make a profit or break even.
Are Scratch Offs Worth It
Hope you enjoyed the experiment, I sure did!
More of a visual learner? Watch my YouTube video as I go through the data collection and analysis!
Scratch-off lottery tickets are one of the most widely available forms of gambling that you can take part in. These tickets are usually in the price range of about $1 to $30, and allow you to win prizes that range anywhere from a free chance at another lottery ticket, to jackpots in the tens of millions of dollars.
But what is the true value of a lottery ticket? The state lotteries have to be making a profit, but how large of a profit are they actually making? Are tickets worth 99% of the price you pay for them? 85%? What about 50%? Considering the amount of people that play these scratch off lottery games, it’s kind of surprising how this information is not common knowledge.
In this article, we’ll be going over how to calculate the expected value of a lottery ticket, and finding out how large of a return we should expect to see from our purchase.
First of all, we’re going to need some data. In order to calculate the true value of a lottery ticket, we will need each prize, along with the odds of winning that prize. Fortunately for us, many state lotteries provide these detailed odds on their websites. Today we’ll be looking at the value of scratch offs from the California State Lottery.
The PDF below gives us all of the ongoing games and possible prizes to win, which is all that we need in order to calculate the expected value of a ticket. This chart shows the possible prizes and odds of a $30 game called $10,000,000 Bankroll, which we will be using as our example.
The way that we can calculate the true value of this ticket is by finding the value of each individual prize, and then adding all of those values up.
To find the value of the possibility of winning an individual prize, we can use the following formula:
Let’s first calculate how much the chance to win $10,000,000 is worth. We have a 1 in 3,000,000 chance at winning $10,000,000, so $10,000,000 * (1 / 3,000,000) = $3.33. This means that the chance of winning $10,000,000 from this ticket is worth $3.33 on its own.
When we use this formula for all 12 possible prizes we could win from this ticket and add them all up, we get a total value of $23.96. However, this ticket costs $30 to buy, which means that on average, you will only get about 78.9% of your money back. Compared to other methods of gambling, this is an awful return, considering that games such as blackjack and roulette are upwards of 95%.
But, let’s not look at just one ticket, let’s look at all 57 scratch off lottery games that are currently being advertised. First of all, let’s look at the expected return of the ticket, grouped by the ticket’s price:
We can see that as the price of the ticket increases, the % return increases as well. The return is as low as 59.7% for a $1 ticket, and reaches as high as 80.5% return for a $30 ticket.
So does this mean that we should be buying the more expensive tickets, since they have a higher expected return? Absolutely not. With the more expensive tickets, we are losing a lower percentage of the amount we paid, but we are wagering a larger amount, leading us to a higher total expected loss. The chart below shows the expected loss in dollars grouped by the price of the ticket:
We are only expected to lose about $0.40 when buying a $1 ticket, and we are expected to lose nearly $6 when buying a $30 ticket.
The last metric that we will calculate is the overall probability of winning a prize from a ticket. We can do this by simply adding up all of the odds from our table. For example, if we had a 20% chance at winning $5 and a 10% chance at winning $15, we would have a 30% chance at winning either of those two prizes (20% + 10% = 30%).
Are 10 Scratch Offs Worth It
After adding up all of the probabilities from the $10,000,000 Bankroll game that we were looking at, the overall probability of winning a prize seems to be 35.9%, which means that you have just over a 1 in 3 chance of winning a prize when buying this ticket.
Let’s take a look at the probability of a winning ticket, grouped by the price of the ticket:
We can see that the more expensive tickets have a higher chance at being a winning ticket, while the cheaper tickets have a worse chance. A $1 ticket has a 22% chance of winning any prize, while a $30 ticket has a 36% chance of winning any prize.
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You will almost never see a scratch off lottery ticket with a positive expected return, but I have seen one occasion where this has happened. If you want to learn more, check out my video on the story of Cash Winfall on YouTube.
Hopefully this article allows you to make more informed choices while gambling on scratch off lottery tickets, and if you’d like to take a look at the odds of winning prizes for any given ticket, you can go to CaLottery’s Website and scroll down and click on “See Odds for all Prize Levels for all Active Scratchers Games”.
If you enjoyed this article, feel free to check out some of the other analyses that have been written on MindingTheData.com, or follow us on Instagram @MindingTheData. Thanks for reading 🙂