Lottery as an investment
August 03, 2006
I have always been of the belief that Lottery is a tax on people that are bad at maths. It is still for many people throughout the world the closest thing besides home buying they will ever come to investing.
In Panama thousands of lottery vendors setup shop in front of supermarkets or on the street. You will often hear mobile vendors walking around shouting “Billetes, Billetes”.
There are drawings every Sunday and Wednesday where people are pealed to the TV screens. The price for a ticket is $1 and it pays up to $2000. Each ticket has a 4 digit number printed on it and you see people hunting around at various stalls for their favorite tickets. Of course a 1/9999 chance of winning is better than in most lotteries
The vendors buy their tickets from La Loteria. I haven’t been able to find out how much they buy them for, but supposedly they can return any unsold tickets after the drawing, giving them a free chance to win on the numbers they haven’t sold yet. So I suspect that it’s not that bad a business for them. Most of the vendors are ladies but the buyers consist of a wide cross section of society.
Read more Anecdotal Economics here
Comments:
The Lottery is BIG business in the states, with individual states, (like mine) coming together with other Midwestern states to offer multi-state lotteries. The biggest one is called Powerball, and because there are so many players the jackpot can get pretty large. In fact, sometimes people will pool a couple of bucks together, like 10-15 office workers or a few factory workers will all put their money together and buy a bunch of tickets and then share the winner.
here's a link to it right now, it is all computerized, every little service station, convenience store and grocery store sells tickets via a computerized system managed by the state, and there is a drawing twice a week.
http://www.molottery.com/aboutourgames/howtowin/numbergames/powerball/powerball.shtmAs you can see, the next drawing is tomorrow and the jackpot is $51 million US. The good part is that the various lotteries generate revenue for other state functions like education. But it is definitely a tax on the statistically ignorant.
Then again, for $1 dollar, you can buy a couple days of day dreams. When one soda is more than a dollar, it's not hard to justify it...
Thanks for linking to my "anecdotal economics" post, I will link back...
Posted by: djobe at August 22, 2006 09:35 AM
