Why You Are Wrong About Lotto

Stop Saying Midwit 'hot takes' on the Lotto

Everything you repeat about the lotto is wrong.

You can thank a recent run-in with your stereotypical midwit for this rant interrupting the series of posts on options.

What happened?

“The lotto is a stupid person tax on dumb poors”. That is what. Another interaction with pure midwit performing a bout of self-fellatio on themselves. This time for their ‘superiority’ to lotto players. Of course, this is more parroting from a “doctor***” who’s only skillset is repeating things. (“Doctor” as in a phd in something useless).

So I present the following postulates:

If you have ever smugly said “the lotto is a stupid person tax”, yooooouuuu might be a midwit.

If you think poor people who play lotto are inferior to your vast intelligence, yooooouuu might be a midwit.

If you only buy the lotto as part of your office pool when the mega jackpot is in the $100s of millions because you heard on the news that it has a positive expected return but don’t account for the fact when you split it with your 10 coworkers you are right back to a standard jackpot, yoooooouuuu might be a midwit.

Are Jeff Foxworthy ‘yooouuu might be a redneck’ impersonations still a thing?… I remember not getting the punchline as a kid because honestly who doesn’t have more broken down cars in their yard than drive-able cars in their driveway? Anyway, we should bring bring that back.

Why Should You Play Mega Jackpot Lotto?

Lotto is one of the most asymmetric bets you can make.

I am talking about mega jackpot lotto games (MegaMillions or Powerball mostly) here. Games with a very low cost to play, but a 7-figure+ payout. Seriously, for a $2 ticket your max upside is winning generational wealth. These games starting jackpots are in the $20-40 million range.

“But your chance to win is so low”…Yes. And your point? Huge asymmetric upsides don’t come with high probabilities of payoff.

The cost of lotto is so low it makes it an inconsequential expense. Most drawings are twice a week, which means you could play $4-8 a week and have a chance for legitimate life-changing wealth. It is buying the cheapest yet highest-upside call option you can. “But if you put those $4 a week into equities over a 40 yr…” STFU Gary Gensler, that isn’t going to get you to the promised land.

The “Doctor” who scoffed at playing lotto spends the equivalent on his soy latte frappuccino everyday. The only upside of expensive soy-sugar drink is increased estrogen & small soy penises with a side of diabetes.

He is the same midwit who buys into his office pool with 10 other people when the jackpot is $400 million “because the news says the expected payoff is approaching break-even”…not realizing splitting $400 million 10 ways is only $40 million to you, or a standard weekly jackpot. (Seriously, only reason to buy into an office pool is the small chance the office wins, you aren’t the one chump left working when they all quit).

Should You Start Buying Tickets?

The average odds on the game are terrible. You are almost guaranteed to slowly bleed money year after year and never actually win any meaningful amount.

The chance of winning the jackpot in these mega lottos is like 1-in-300 million. 0.0000003%. For reference, there are a little over 300 million adults in the US, so it is literally like being randomly chosen from every adult in the entire USA.

Even if you played every draw (2x a week) for 40 years, you still have around a 1-in-100,000 chance of winning. That is still pretty dismal despite over 4,000 attempts.

Lotto Is A Stupid Tax on Poor People…Nottttt

The hallmark of a midwit is their need to feel superior by telling everyone else how they should live their lives. This is despite being spectacularly unspectacular themselves. (Yes, “Doctor” who makes $55k a year). This phenomena is especially true when talking about poor people. The “Doctor” has successful parents who paid for his entire college and gifted him his first starter home. The stereotypical guy who “starts life on 3rd base and think they hit a triple”.

Therefore, having no understanding on the challenges facing the lower class does, he is the definitive expert on how to fix the poors problems.

The image of the lotto purchaser according to the uppity midwit

Guess what? Playing mega jackpot lotto is a completely logical move when generationally poor.

(Note - yes there is always a way out and the option of learning a skill and a scalable side hustle and a bunch of people have worked themselves out of poverty and blah blah blah…. Consider that all these concepts so familiar to you are completely foreign to the most impoverished. Then add in the years of psychological training that you won’t ever be able to make it out and seeing hard working folk continually getting screwed by society/gov’t/others. There is a lot going on that makes it laughable to just recommend someone in poverty ‘learn a scalable side hustle’.)

If you see no way out of your current predicament and have never seen someone lift themselves up to success, taking a flyer on a 1-in-a-lifetime random draw win makes sense.

The Dark Side of Lotto

That said, unfortunately there is a large overlap between being poor and addiction or destructive habits. (Note - not all poor people by any stretch are addicts, but a large amount of unhealthy habits will tend to make someone poor). This is why there is the stereotypical guy at every gas station on pay day Friday chain-smoking cigs while furiously scratching tickets and re-buying with any winners. This is not healthy and the antithesis of making small asymmetric bets.

These minor games are never a good choice. Let’s briefly run through why scratch tickets and minor lottos are losing ideas.

Are Scratch Lotto Tickets Good Bets?

No.

You want asymmetric returns. Winning $10,000 on a scratchie is not life-changing money. And the expected value of any ticket is going to be negative to you. You are likely going to slowly lose money, and even in the low probability chance you win, it isn’t life-changing so you are in the same spot.

Even if the probability of wining the $10,000 is significantly higher than winning the mega lotto jackpot, its not a high enough win to make it worth the negative expected value of playing.

Therefore, scratch tickets are dumb. The only upside is the 30 secs of joy that comes with scratching.

(Going deeper - For scratch tickets they print only so many tickets for a run of a game. They know how many winning tickets there are ahead of time for nearly all scratch games. On the back it will say something like “overall chance of winning is 1-in-4”. So if they print 100 tickets, 1-in-4 odds means there are 25 winners. Some of the winners may be for more than ticket price and others for less.)

Usually the expected payout is around 50%. This means for every $1 spent on the tickets, only $0.50 is actually paid out to winners. Said another way, over your lifetime you can expect to lose 1/2 the money you put into scratchies.)

What About Win-For-Life Type Scratch Tickets?

They have recently come out with the “Win For Life” tickets. But even these tend to be lower than the standard mega lottos. $5,000 a month for life sounds big, but its $60,000 a year. Certainly nice, but not generational wealth. A $20 million mega jackpot divided over 40 years is $500,000 a year (ignoring tax, fees, and time value of money).

What About Scratch Tickets with Million Dollar Jackpots?

Scratch tickets have also started to get higher jackpot amounts. However, these tickets tend to have a higher sticker price. That $20 ticket may have a $5 million grand prize, but $20 is a lot of money to spend on a single ticket if you are on a tight budget.

(Note - if you are buying these, don’t spur of the moment buy. Look online first to see how many jackpots are left. (Can’t verify accuracy of this site, but this is the idea. Additionally, different states and games do publish the numbers.)

The last thing you want is to be buying a ticket at $20 with no jackpot winners left. )

Should You Buy The Smaller Lottos With A Better Chance To Hit The Jackpot?

No. Again.

You want asymmetry.

Minor draw lottos like Pick 3 and Play 4 are not good plays. For instance, winning the jackpot on one of these is usually low 4-figure to 5-figure win. Again, over a long enough time, you expect to lose like half the money you put into buying tickets.

What About If I Have A Strategy?

Unfortunately, a lot of ‘increase your chance of winning’ sites tell you to focus on smaller jackpot games with better odds. They recommend lots of research into how many jackpots are outstanding, etc etc.

1) If you have time to research each lotto game and strategize, you have time to try to make a real side hustle

2) We want generational wealth, not stacking up small dopamine hits

In short, if you have time to make a strategy to gamble, you probably have time to learn a skill and just make money instead.

Wrap-up: Why You Are Wrong About Lotto

I got a little carried away with my ranting and this post ran long. I may make a part 2 to actually discuss some of the probability behind the mega lotto & what to do if you win.

However, in the meantime just stop saying dumb ‘hot takes’ about the lotto. When you are desolate and have little chance to pull yourself out, it is a logical move.

Honestly, the only reason not to play the lotto is due to the subconscious reinforcement that you are unable to improve your own life. The money and time (albeit how small for both) spent getting tickets and hoping for someone else to make you rich is reinforcing you can’t do it yourself. Buying a lotto ticket and ‘hoping to hit it big’ is the equivalent of negative self-talk.

If you frame it correctly, it is hard to argue against playing mega lotto. You should view it as “This is one of many asymmetric bets I am making, including bets on my own successful career”.

If you have completely given up on improving your lot in life, its hard to argue against playing the mega lotto.