Does it pay to buy the pot in the Canadian 6/49 Lotto: implications for lottery design

Steven D. Moffitt and William T. Ziemba

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Canadian 6/49 Lotto©, despite its unusual payout structure, is one of the few government sponsored lotteries that has the potential for a favourable strategy we call "buying the pot". By "buying the pot" we mean that a syndicate buys one of each ticket in the lottery, ensuring that it holds a jackpot winner. We assume that the other bettors independently buy small numbers of tickets. This paper presents (1) a formula for the syndicate's expected return, (2) conditions under which buying the pot produces a significant positive expected return, and (3) the implications of these findings for lottery design.

Keywords: monetary policy; quantitative easing; financial stability; financial fragility; shadow banking; maturity transformation; carry trades (search for similar items in EconPapers)
JEL-codes: D40 G12 G14 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2017-02-15
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:70755

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