$100 Invested in 100 $1 Lottery Tickets

$100 in lotto tickets
($100 of $1 lottery tickets)
 

Investment Idea: $100 invested in 100 $1 lottery tickets.

Total Investment: $100

Total Time Cost: 00:30:00

Extra Costs: None

Total Time Spent on Investment: 10 minutes spent online finding lottery ticket with the best odds. 5 minutes spent buying lottery tickets. 15 minutes spent scratching off all the tickets.

Research and Preparation: Gambling and the lottery have always held an enticing allure for a lot of people: the idea that you could spend just $1 and be rewarded in prizes that are worth exponentially more, and all it would take is a little bit of luck and all your problems would be over. I knew I wanted to try my luck on $1 lottery tickets because I thought it would be cool to buy 100 of them. I also knew that I could find the odds of winning online at http://nylottery.ny.gov/.

After comparing all of the odds for the $1 scratch off tickets I came to a couple of conclusions:

– There are twelve different $1 scratch off tickets available in New York

– The odds of winning ranges from a best of 1:4.64 (Instant Take 5)

– To a worst ratio of 1:5.09 (Happy Birthday Cupcakes)

Happy Birthday Cupcakes Scratch off Ticket
(Never buy birthday themed tickets)
- The average odds of winning on a $1 scratch off ticket was 1:4.88

– The NY lottery website never refers to odds of winning, but instead calls it “Chances of Winning”

– The $1 scratch off ticket with the worst odds is the “Happy Birthday Cupcakes” ticket (1:5.09), ticket (1:5.09). Also, the other birthday themed ticket “Happy Birthday Presents”, with odds of 1:4.99, has the third worst odds of the batch. If you value your friends and give them lottery tickets for their birthdays please don’t buy them birthday themed tickets to help them increase their odds.

Happy Birthday Presents Scratch off Ticket
(Don’t buy these tickets either)
- The $1 scratch off ticket with the second worst odds is the Gold Rush, 1:5.02. I assume it has such bad odds since the allure of gold suckers people in.

How I chose which lottery ticket to buy?
After seeing the spread of the odds and the possible prizes I decided to choose the $500 A Week For Life ticket. It’s overall odds of 1:4.84 wasn’t the best, but it put it in the better half. Also, its namesake price of $500 a week for life was the best possible grand prize out of all the $1 scratch off tickets. Winning $500 a week for life would have provided the greatest possible return for my $100 I can think of. Of course the odds of winning 1:7,938,000 but, “hey you never know.”

Some of the other odds for the $500 A Week For Life ticket:

Prize Odds of Winning Expected Winning Tickets Total Winning Amount
$1 1 in: 10.00 10 $10
$2 1 in: 15.15 6 $12
$4 1 in: 62.50 1 $6
$5 1 in: 125.00 0 $0
$10 1 in: 100.00 1 $10
Total 1 in: 4.84 18 $38

To make the above table I took the total number of tickets (100) and divided by the odds. This left me with “Expected Winning Tickets”. If this number had a remainder, I rounded down since you can’t buy or win a partial ticket. Also, everyone loses when they gamble, so I wasn’t going to give myself the benefit of the doubt.

So it looks like I should have anywhere from 18 to 21 winning tickets, and win a prize amount of about $38 to $40, for a return of at least -60%.

With my ticket chosen and my research done I headed to my local bodega and asked if they had 100 of the $500 a Week For Life lottery tickets, just to check before I bought some. They did.

Counting 100 Lottery Tickets
(Counting 100 lottery tickets)
Counting 100 Lottery Tickets
(Checking all of the tickets)
As soon as I had paid for the tickets with my five twenty dollar bills I couldn’t wait to get home. (Side note: something annoying about lottery ticket buying is it is cash only, so no credit card rewards points here.)

Stack of Lotto Tickets
(Stack of lotto tickets)
All of the tickets were stacked and ready to scratch! Was I about to be the proud recipient of $500 a week for the rest of my life? Or had I just thrown $100 down the drain?

Piles of lotto tickets
(Guess which pile is filled with winning tickets?)
If you said the one on the right then you are correct. After fifteen minutes of furious scratching I came away with twenty two winning tickets and a total prize amount of $41. I had lost $59 on this investment in a matter of twenty minutes, and I had actually slightly beaten the odds that I had found and reproduced above.

Reason for Investment:

Everyday, millions of people in America play the lottery and hope for the best, but more often then not it is just them throwing their money away. But wouldn’t it be great if you could just on a whim plop down $1 and buy a ticket that changed your life? I decided it was worth it to try it a hundred times over and invest $100 in $1 lottery tickets.

Returns: $41. I actually came out ahead of what I had expected on this investment, but even that meant a massive loss of $59.
My Total Winnings Table:

Prize Amount Number of Winning Tickets Total Winnings
$1
13
$13
$2
7
$14
$4
1
$4
$10
1
$10
Total
22
$41

As you can see the predictions from my research were almost spot on.

Big ticket winner
(The big ticket winner was just $10)
The thrill and rush of possibly winning started to wear off after about the twentieth losing ticket. Each card had a couple of “Life” symbols on them, and every time you got a second you just dreamed of seeing the third one under the remaining graphite. However it never appeared and never will and it just kind of turned depressing. How could people put themselves through this humiliation and teasing every day of their lives? This is definitely an investment that is not rigged in your favor and can never really bring you positive returns.

https://s3.amazonaws.com/altinvestments.org/img/altin.png

Tagged with: , , , ,
Posted in Alt Investments, Investing
19 Comments » for $100 Invested in 100 $1 Lottery Tickets
  1. how to win a lottery says:

    Its such as you read my thoughts! You appear to grasp a lot about this, such as you wrote the e-book in it or something. I think that you simply could do with some percent to drive the message home a bit, but other than that, this is excellent blog. An excellent read. I’ll certainly be back.

  2. tips on how to win the lottery says:

    Hey very cool website!! Man .. Beautiful .. Superb .. I’ll bookmark your web site and take the feeds additionally?I’m happy to find numerous useful info right here within the submit, we’d like develop more techniques on this regard, thanks for sharing. . . . . .

  3. Jason Beck says:

    Minor correction – your expectations should have been $36, because winning 1 ticket worth $4 will not grant you $6 in profit :-)

    I think it’s almost “suspicious” that you got more $1 and $2 winners than expected ;) But really just within the margin of… odds!

  4. Eric says:

    It seems strange that the odds of winning $5 are worse than the odds of winning $10. Is that a misprint?

  5. Mauro Santos says:

    This would be an good opportunity to run some machine learning techniques on the data of the tickets :)

    • Alan says:

      Been there, done that.

      Doesn’t help a lot.

      You may find some weird patterns (at least in my dataset).

      And that info might improve your odds about 0.001% but that’s about it.

  6. spyderman4g63 says:

    The higher the ticket prices the better the odds in my state. I wonder how that would change your experiment. Would you be better off buying five $20 tickets at 1:3.15?

  7. Sam says:

    I wonder if the return would vary at a if you purchased say, 20 tickets from 5 different stores.

  8. Anonymous says:

    The comments above mine are really weird. They’re like, spam that is trying to help you write a better blog by giving you bad advice. I have never seen this before.

  9. Anil says:

    What about tax? I believe you owe some tax on the $41 ‘investment’ so you’re ‘winnings’ are really only about $30.

  10. Adam Duren says:

    I believe you only pay taxes on net winnings. Winnings minus purchase prices. In this case your net winningswould be -$49 and you would not owe taxes.

  11. Nzen says:

    Well of course you came out behind. You scratched them all. If you are buying in bulk, you get to exploit the weakness uncovered by Eli Rosenberg, as reported in Wired magazine. Essentially, he found a statistically significant (3/5) portion of lotto scratchers have raised inks over the winning spaces. Then, you return the unscratched cards, claiming they were for a charity and weren’t bought. Rosenberg suspected it was a laundering scheme.

  12. Damian says:

    I knew someone that worked at a gas station and they found a pattern in the winning lotto tickets. They would guess at which tickets would be the winning ones. I think they were right 75% of the time. It was also against store policy them to buy lotto tickets from the same store. So, if you found the pattern with the id number at the bottom you could potentially beat the system.

  13. I love this. I’ve always wondered what would happen with something like this and it was nice to live vicariously through your story.

    It also reminded me of the WIRED article about the guy who figured out how to pick winning lottery numbers based on the serial numbers, but he was so smart it wasn’t worth his time.

  14. dnm says:

    @anil, there’s no tax because of the $100 cost. He would only pay tax on profit.

  15. Ruben says:

    So to break even, you need to live
    1$-38$/100=0.62$
    0.62*7938000/500/52 = 190 years…

    In Belgium there’s a lottery where you break even after 70 or 80 years. Meaning if you’re SURE that you will live to be 100 years, it’s a business opportinity ;) (If you’re not sure you’ll need to look up the mortality distribution…)