Resale Prices of Lottery Tickets
Your article on people negotiating to buy $100-winner lottery tickets for thousands of dollars illustrates the rampant ignorance surrounding the true odds in this game of chance.
There are 100 slots on the grand prize wheel. Forty slots pay $10,000. Thirty pay $50,000. Twenty pay $100,000. Five pay $1,000,000, and another five pay $3,000,000. That’s $23,900,000 on the wheel. Divide that by the 100 slots and the average win expectance comes to $230,000--or roughly $191,000 after the 20% deduction for taxes.
Divide that by the one chance in 625 that a $100 winner will get to spin the wheel and the real value of a ticket drops to a measly $382 (plus its $100 face value).
Even worse, the actual value of the $1,000,000 and $3,000,000 winners must be slashed by roughly 50% since they are paid out over 20 years. Punch in the new numbers, and the worth of that $100 ticket melts to under $180 (plus the $100 face value). A far cry from $5,000.
MAX SHAPIRO
Los Angeles
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