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Tristan comments on Always check your assertions... (Winning the Lottery) - Less Wrong
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It's unclear that this was entirely unintentional on the part of the state lottery officials. The report certainly seems to conclude that the lottery attracted a large volume of bets, just as desired. It says that the state made money on this, too... though I don't quite understand how. Clearly someone had to lose money.
If I understand the matter correctly, the "someone" who loses money is the same someone who always loses money when buying lottery tickets - the buyer. The construction of the roll down system just makes it so that some of the money lost by players from the (majority of) rounds during which the jackpot is built towards the cap, is redistributed towards the round where the roll down happens. So much so, that this roll down round actually has an expected gain for each ticket. The players clever enough to only buy tickets in the round in which the the roll down is expected to happen thus profit from those who buy tickets in all the other rounds. The state, however, takes its 40 % profit from everyone.
Right. The state still loses money when this roll-down happens, but this seems to have been intended as marketing, which makes measuring its total impact harder.
Well, wether the state is losing money or not when the roll-down happens depends on how you define "losing" in this context, or rather, I suppose, on bookkeeping. I would say not, for the simple reason that although the payout on rounds where the roll-down happens may exceed the income on that particular round, the excess payout, so to speak, is made with money that, as I understand it, was never counted as profit in the first place.
To elaborate: In this particular lottery, the state is taking 40 percent of every dollar betted as overhead and profit. The rest (60 percent, obviously), is paid back to the lucky winners in various proportions. However, the concept of "jackpot" basically means that each round where there is no winner with all the right numbers, a portion of the 60 percent is moved into the "jackpot" and thus made available as potential winnings in the next round. This means basically that even though the payout when the jackpot (or roll-down) falls out may exceed the total amount paid for tickets in that round, that doesn't affect the state's overall profit, which continues to be 40 percent of every dollar.