Chelsea Green Publishing

Chelsea Green Blog

Playing scratch

There’s been a secret Santa, maybe more than one, busy around the Chelsea Green offices the past week. Every morning we arrive at work to discover some little treat at our desks. The first few mornings it was candy, then yesterday a pencil, and today a “Bah Humbucks” scratch ticket from the Vermont Lottery. I won $10! Sandi asked me if I was going to take the cash or turn my ticket in for more tickets. Being an irredeemable nerd, I decided to calculate the expected return on the game before choosing how to take my winnings. So at least for this particular scratch game, the expected return on a $2 ticket is an average of $1.50215825. Meaning, if you play it over and over, you will win an average of a buck fifty for every two bucks you spend (aka, 75 cents back for each dollar spent). Of course, those winnings come in lumps, so the thrill can be pretty cool and maybe well worth the price of admission. Now historically I’ve been more of a Powerball type player than a scratch player. So now I’m wondering what the expected return is on a Powerball ticket. Let’s mosey on over to their website and see… This is a little tricky, because the grand prize is always changing day to day, and it turns out to have a pretty major effect on your expected return. For example, today’s listed grand prize is $53 million. In that case, the expected return on a $1 ticket is 55.9 cents. (I’m including the odds of winning the grand prize as well as the odds of winning the lesser prizes.) If the grand prize gets up to $100 million, your expected return rises to 88.1 cents. The break even point relative to the Bah Humbucks scratch ticket is when the Powerball grand prize is $80,938,548 — that’s the point at which the scratch ticket is (statistically speaking) worth exactly as much as the Powerball ticket. If the Powerball grand prize falls below that amount, your best bet is the scratch ticket; if Powerball goes over that amount, it is your best bet. But all that is based on the Statistics 101 rule of “an infinite number of plays.” A person can’t play these games an infinite number of times. So the real odds are a little different. And given that the Powerball game sucks in its customers with the promise of an otherwordly huge grand prize (that comes with such impossible odds) yet is very stingy with its lesser prizes, while the scratch has a lower grand prize but is more generous with its lesser prizes… um, this sentence is getting too complicated for me; I’ve gotten lost in my grammar. In other words, Powerball is a sucker’s game. While the overall expected return is roughly equivalent to the scratch, its expected return is heavily tilted towards the grand prize, which, quite simply, you and I are never going to win. The odds of winning the grand prize are 1 in 146,107,962. (The expected return of Powerball excluding the grand prize is a measely 19.7 cents on the dollar; the expected return on the scratch ticket excluding the top prize is still a relatively respectable 73.4 cents on the dollar.) If you bought 10 Powerball tickets every day for 50 years, you’d have bought a total of 182,500 tickets (costing you $182,500). You’re odds of winning the grand prize in all that time would be 1 in 800. That’s not very good. I guess the moral of the story is that I’m a rube just like everyone else who gets impressed with a big shiny thing like a huge Powerball payoff. It’s time for me to start playing scratch. Which brings up another question I’ve had for a long time: how does the lottery compare to buying life insurance? Well, I can’t find useful numbers in my quick Google search, and I really do have other work to do, so we’ll have to leave that question for another time. Stay tuned!


Born on Third Base: A Q&A with Author and Inequality Activist Chuck Collins

As inequality grabs headlines, steals the show in presidential debates, and drives deep divides between the haves and have nots in America, class war brews. Does it have to be this way?Can we suspend both class wars long enough to consider a new way forward? Is it really good for anyone that most of society’s […] Read More

Three Principles to Survive the Future

What guiding principles will you need to not just survive the future, but imagine a better one? Surviving the Future is a story drawn from the fertile ground of the late David Fleming’s extraordinary Lean Logic: A Dictionary for the Future and How to Survive It. That hardback consists of four hundred and four interlinked dictionary entries, […] Read More

The 5 Rules of Lean Thinking

Are you ready to co-create the future? These 5 Rules of Lean Thinking are a useful tool as we set out to collectively invent a post-market future.Surviving the Future is a story drawn from the fertile ground of the late David Fleming’s extraordinary Lean Logic: A Dictionary for the Future and How to Survive It. That […] Read More

Solar Dollars: Promote Renewable Energy & Support Local Economies

How can you use the sun as a way to not only generate renewable energy, but support the local economy and provide interest-free financing for utility companies?Author Thomas Greco (The End of Money and the Future of Civilization) has the answer: Solar Dollars!In a recent post on this blog (Beyond Money), Greco makes the case […] Read More

Using Permaculture Principles to Design Resilient Cities

The Permaculture City begins in the garden but takes what we have learned there and applies it to a much broader range of human experience; we’re not just gardening plants but people, neighborhoods, and even cultures.Author Toby Hemenway (Gaia’s Garden) lays out how permaculture design can help towndwellers solve the challenges of meeting our needs […] Read More
Follow us
Get every new post delivered to your inbox
Join millions of other followers
Powered By WPFruits.com