Observation: Popularity of scratch-off lottery tickets remains high despite their low odds of winning. The attraction of exponentially increasing an “investment” of $1 with no skill involved draws people to these games.
Hypotheses: If a $1 scratch-off lottery game is played 100 times, the player is likely to lose money in the end. Most people playing the game will eventually lose money, only a few will gain.
Variations: A player can potentially win a large sum of money on the first play with some “luck” on their side.
Experiment: 100 Texas Lottery scratch-off “Amazing 8’s” games costing $1 each will be purchased. 20 games will be purchased from 5 separate establishments. Amazing 8’s have odds of 1 in 4.65 games at least break even.
I was thinking of buying a roll of scratch-offs, but I wanted to randomize the process, so instead I bought 20 Amazing 8’s from each of these five establishments: Albertson’s, Chevron, Diamond Shamrock and Exxon. I withdrew $100 from an ATM to make all of my purchases, so after tax I spent a flat $100 on scratch offs. The whole process took me an hour as some places I visited did not have Amazing 8’s.
Got my trusty tools ready: Two quarters. One is an American quarter and the other is a Canadian Quarter. I’ve found that Canadian quarters are much better for scratching mass amounts of lotto tickets!
Start scratching! I would scratch and scratch until I found a winner, which would then be placed inside the “Winner$” basket.
Scratching 100 lottery tickets is NOT as exciting as I thought. It felt more like a boring job. Next time I do gambling experiments, I’m goin’ ta Vagas.
Winner$ basket starting to fill up with $1 and $2 wins.
The real gem of the lot was this ticket which won $60! The chances of getting this are 1 in 1,500.
Tabulate each amount won.
Losers were placed on the table, and the proud winners were put higher up on the stool (Just for a more dramatic metaphorical effect)
Report the totals. I came out ahead with $102! A 2% return.
The proud winners in all their glory, especially our champion: Mr. $60!
After the experiment was completed, I went to the grocery store to cash in my $102. I then proceeded to the Bank of America ATM and deposited the cash directly back into my investment account. So I performed this experiment and MADE $2 and learned a little too!
Conclusion. This “investment” of $100 was more of an experiment and should not be used as investment advice. Anyone who invests their money in the lottery for purposes other than mild thrills and entertainment is (according to the odds) just dreaming. The odds prove that if you play long enough, you will lose 75% or more of your money. Of course you can also win a lot of money, but it’s highly doubtful. I just happened to buy the right tickets at the right time for this particular experiment, but if I repeated the experiment again, I would most likely not make a profit or break even.
Hope you enjoyed the experiment, I sure did!