Other Outlets in Michigan Sell Over $23 Million in Losing Lotto Tickets
The good news is that someone needy has a lot of money coming into his pockets, but the bad news is that there are a lot of needy people out of money at the same time. The good news is that the money from the lotto that the State gets is used for education, the bad news is that these educational dollars are not being used to teach basic probability and statistics to all the foolish people who play these games with terrible payback.
Whenever someone wins a big payout like this, the media taps into it big time particularly the media around where the ticket was sold. Mason County Press reported this story, and used it as a conversation starter on Facebook a few times. The City of Ludington Daily News (COLDNews) also tapped into this, and if you notice, the local casino in Manistee took it as a great time to advertise their business.
The Big Numbers Behind the Big Numbers
To understand the Michigan Lottery system we should do a little research on the numbers, here is a relevant chart, and the official website it comes from thereafter.
Notice the numbers are in thousands, so that the annual total ticket sales are a little more than $2.4 Billion. Michigan population is just under 10,000,000 so that the average Michigander spends $240 on these games of chance. And what do they get for it? Well if all prizes were claimed, it is just under $1.4 Billion. So just noticing these convenient ratios, the average Michigander gets $140 in prize winnings, ergo they lose $100 each year to gambling run by the State. If we do further math, we find that for every dollar that's spent on these games, about 58 cents is paid off. This is what probability people call your expected return (or value)-- and 58 cents is an awfully low number as far as games of chance go.
Craps gives you an expected return of over 98 cents whether you play the pass line or play against it.
Betting on Red or Black or an individual number in Roulette will have an expected return of nearly 95 cents.
Slot machines and the like are usually set at about a 10% house advantage, meaning you get back 90 cents for your dollar.
So why would anybody in their right mind play games with the State, when the house is set to rake in 42 cents of every dollar they invest? Especially when they take some of it away from them when you win big. For large prizes, the lottery commission withholds 25% of Federal and 4.35% of State Taxes from winnings. So there is roughly 30% of the money going back to their government before they even see it.
Therefore, the $13.3 million prize came on the backs of about $23 million played in by others, and about $4 million of the prize goes back to the IRS and State immediately. This effectively makes the winnings at about 40 cents on the dollar.
If you must gamble for fun, stay away from this State-sponsored insanity and go to your local casino where you will have a lot better chance of coming out on top, and have more fun.
The Mason County Press reports today that the Lottery winner has stepped forward, but chooses to remain anonymous, and that he has claimed the $8.4 million lump sum before taxes. After taxes, that's less than $6 million, reducing the return to less than 30 cents on the dollar. The house wins big time.
8.4 before taxes and under 6 after. That would really upset me LOL
If we were so unlucky to get a tenth of that.
What a wonderful thing for some lucky person - thank God he wants to stay anonymous. Human nature being what it is, he would have every relative crawling out of the corner asking for money. I wish whomever the very best.
May they be granted the wisdom they previously lacked in making the purchase of a lottery ticket. Winners from the past either get overwhelmed with new friends or wind up worse off than when they started. Money can't buy happiness, but it can make misery more interesting.