Most people should not be playing the lottery at all since there are so many better things they can do with their money at a casino. If they can afford it and find it entertaining, the lottery isn’t the worst thing that is available in the casino either. It depends on what games you play and how much you spend on it as well.
House Edge and Payback Percentage
The best odds that a player can find for a lottery game is on the scratch ticket games. There is not much of a difference whether the player is grabbing a coin to scratch off a ticket or playing on their phone on a scratch-off lottery smartphone app. Compared to a casino game such as blackjack or craps, a scratch ticket is a lousy bet. The best way to measure a bet is by its house edge or payback percentage or return to player (RTP). House edge is usually discussed in table games like roulette or blackjack, but players often use payback percentage when talking about slot machines or the lottery. The payback percentage and the house edge together add up to 100%. The house edge is just the mathematical average of the expected loss on each bet expressed in the form of a percentage. If the house edge is 1%, the player expects to lose an average of one dollar on a hundred dollar bet. The payback percentage is ninety-nine per cent, which means that the player expects to win ninety-nine dollars back for every hundred dollars that they bet. The payback percentage and house edge are functions of the payout odds and odds of winning. If the bet pays off at the same odds as the winning odds, it is termed a break-even bet.
Suppose a person bets a dollar on the flip of a coin. If it pays off at even money, i.e. they stand a chance to win or lose a dollar, then the house edge is 0%. Over some time, the wins and losses should even out. Now consider a person betting on a roll of a six-sided die. Consider that they bet on which number comes up, and if they win, they get paid off at 4:1. The odds of winning this are 5:1 because there are six possible outcomes. The house edge on that bet would be 16.67%.
Calculating the Payback Percentage
The payback percentage for a lottery game is calculated in the same way as the method that is used to calculate the payback percentage for a slot machine game. The player creates a table listing all the possible prizes, the odds of winning each award, and then multiply the size of the prize by those odds. This is the expected value for each prize.
When adding all these up, the player gets the total return for the game which the same thing as the payback percentage.