Does it Pay to Buy the Pot in the Canadian 6/49 Lotto? Implications for Lottery Design

Steven D. Moffitt and William T. Ziemba

Papers from arXiv.org

Abstract: Despite its unusual payout structure, the Canadian 6/49 Lotto is one of the few government sponsored lotteries that has the potential for a favorable strategy we call "buying the pot." By buying the pot we mean that a syndicate buys 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.

Date: 2018-01
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