I’ve always been fascinated with why people play the lottery. Everyone knows it’s a bad bet, but the ‘sticker price’ / headline figure keeps people playing.
Stick with this as it’s interesting and I had time to write this out when wife and kids were away! 
I saw an article about a guy in Florida who was reinvesting his winnings and made over $1 million this way after winning 4 times (don’t think that was a jackpot). The odds are extreme and it’s a really bad bet.
Obviously would have been better just sticking the first hypothetical 200,000 in an S&P 500 index fund and letting that roll, rather than ‘reinvesting’ in the lottery.
Anyway, the really fascinating thing about probability (and most people playing the lottery don’t get this) is that the odds of winning (at least for the jackpot) don’t increase with the amount of tickets you buy, nor with the frequency you play!
It’s a common lapse of reason. A popular fallacy.
Buying more tickets does increase likelihood of winning smaller prizes. But here the method of ‘reinvesting’ or cross-betting or anything like that is a terrible idea and a really bad bet.
This is in US dollars, but the same odds are roughly equivalent if you substitute for pounds or your native currency.
Spending $1,000 on Mega Millions tickets carries a nearly 50% probability of getting back $64 or less, a nearly 90% chance the prizes won won’t total more than $92, and a 99% likelihood they won’t top $554.
A 99% chance you won’t even make back half your money with a $1000 spread bet! Let that sink in.
I know, it’s mind blowing. The whole thing. I didn’t read the whole story on the Florida guy who won the lottery 4 times.
It was a Sun article and my eyes glaze over after 2 mins on a Sun article.
But I believe he was essentially reinvesting each win back into the lottery. The article was framing it as a legendary strategy, but it’s actually a really bad bet.
Someone has to win, though, right?
Given a long enough time horizon, everyone wins eventually. Sorry, can’t resist that one
Just some morning thoughts. This is what happens when kids are away and I have more time to think about random problems!
