In Search of a Fair Bet in the Lottery
AbstractAlthough state-operated lotto games have the worst average expected payoffs among common games of chance, because the jackpot can accumulate, the maximum expected payoff is potentially unlimited. It is possible, therefore, that lotto can exhibit a positive expected return. This paper examines 18,000 drawings in 34 American lotteries and finds approximately 1 percent of these drawings provided players with a fair bet. If it were possible for a bettor to purchase every possible combination, however, most lotteries commonly experience circumstances where such a purchase would provide a positive return with 11 percent of the drawings providing a fair bet to the player.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 32 (2006)
Issue (Month): 4 (Fall)
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Other versions of this item:
- Victor Matheson & Kent Grote, 2004. "In Search of a Fair Bet in the Lottery," Working Papers 0401, College of the Holy Cross, Department of Economics.
- Victor A. Matheson & Kent R. Grote, 2003. "In Search of a Fair Bet in the Lottery," Department of Economics Working Papers 2003-16, Department of Economics, Williams College.
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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