Author: riser
I am asked repeatedly: “Is it worth investing money in the Fed30 Lottery?“
I’m not really asked that question but let’s just say I am.
For those who don’t like math, the answer is :
Yes, if and only if the jackpot is 5000 ISH and if you can afford not to win at all for a long time. You should buy 10 tickets with every last digit different. You’ll get at least 30 ISH back so you really are paying only 70 ISH for those 10 tickets. On average, you’ll get 74 ISH or a 5,71% increase.
For those who don’t mind:
The estimated value of a ticket is:
Value = probability of winning the jackpot x jackpot + probability of winning 300 ISH if you did not win the jackpot x 300 ISH + probability of winning 30 ISH if you did not win either of the others x 30 ISH
Value ticket = 1/1000 x jackpot + 9/1000 x 300 + 90/1000 x 30 = jackpot /1000 + 2.7 + 2.7 = jackpot/1000 + 5.4
Since a ticket costs 10 ISH, you need jackpot to be greater than 4600 in this formula for Value Ticket to be greater than 10 ISH.
So, on average when you pay 10 ISH for a ticket when the jackpot is 5000, you will get 10.4 back. If you buy 10 tickets, you will pay 100 ISH to get an average of 104 ISH or a 4% increase.
Here’s a nice trick. Since you can choose your last digit, you can decrease something called variance which is a measure of the probably you will not win for a long time. If you buy 10 tickets with all the last numbers different, you are guaranteed to win at least the 30 ISH bonus. So suddenly you are no longer risking 100 ISH to win 104 ISH, you are risking 70 ISH to win 74 ISH or a 5,71% increase.
Is it worth it? After all, you only get 5,71% increase and it can be long before you win.
The answer is: can you afford to lose and will that 5000 ISH make a difference for you? If you can pay without impacting your trading then yes. If you have that money sitting in a bank account then yes. If that 5000 ISH can be the difference between top-20 or not top-20 or you could expand to another city or another such memorable event, then yes.
Otherwise, no. You need your money for more important and rewarding things, like trading.
Good luck on the end results…