Difference between revisions of "The powerball lottery suspects fraud, but its the Fortune Cookies"

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In unusual circumstances, the set prize amount may be paid on a parimutuel basis which will be lower than the published prize amounts.
 
In unusual circumstances, the set prize amount may be paid on a parimutuel basis which will be lower than the published prize amounts.
 
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</blockquote>
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Evidently the Lottery officials decided not to use this option in this case.
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DISCUSSION QUESTIONS:
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(1) How do you calculate the probability of getting the 5 basic numbers but not the bonus number correct?
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(2) How  many tickets would you  have to sell to expect about 110 people to get the five basic numbers but not the bonus number correct?
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(3) (2)  Do you think that the sales of fortune cookies will increase?

Revision as of 08:23, 26 May 2005

Who needs Giacomo? Bet on the fortune cookie
New York Times, May 11, 2005, National desk; Pg 1
Jennifer Lee

For the powerball lottery, a player chooses 5 distinct number from 1 to 53 which we will call the basic numbers. In addition the player chooses another number between 1 to 42 which we call the "bonus number". The lottery chooses, at random, 5 basic numbers and a bonus number. If your 6 numbers agree with these you win the jackpot (a huge amount)). If there is more than one jackpot winner you jackpot is shared with the winners .There are 9 additional prizes where you do not have to share with other winners.. For example if you buy a $1 ticket and your 5 basic numbers match those of the lottery, but your bonus number does not match the lotteries bonus number, you get $100,000.

When you buy a $1 lottery ticket, the lottery offers you for $1 another bet called the "Power Play". For the Power Play the lottery choose random from the numbers 2,3,4,5,5. If you make this bet, and you win, any prize other than the Jackpot, your prize will be mutiplied the number chosen by the lottery.

On March 30 drawing of the Powerball lottery, 110 players made a $1 bet, choosing as their five basic numbers 22,28,32,33,39 and chose 40 as their bonus number.. The lottery chose the same five basic numbers but chose 42 for their bonus number and they chose 5 for the power play number. 89 of these players did not choose the Power Play and they each won $100,000. 21 players did choose the Power Play and since the lottery chose 5 for the multiplyer, they each won $500,000 dollars. Thus the lottery had to play these players 19.4 million dollars.

Power ball officials stated that considering the number of tickets sold in the 29 states the expected 4 or 5 winners. The lottery does not publish the number of tickets sold. However, we can estimate this number using the fact that the probability of getting the fire basic numbers correct and not getting the bonus number is 1/120,526,770. Using this you would need to sell about 5.4 million tickets to have an exected value of 4.5

The article quotes Chuck Strutt, executive director of the Multi-State Lottery Association as saying:

Panic began at 11:30 pm. March 30 when he got a call from a worred staff member. We didn't sleep a lot that nigh. Is there someone trying to cheat the system?

Then tried a number of theories about the way people choose their numbers. For example they like geometric designs on the ticket when they pick their numbers. Nothing worked, but their first three winners said they had gotten the numbers from a fortune cookie. With this lead they just had to find the fortune cookie maker who had the winning numbers. The found that many different brands of fortune cookes come from the same Long Island City factory, owned by Wonton Food which turns out four million a day. When shown the numbers Derrick Wong, of Wonton Food verified that they had used these numbers. The numbers were chosen from a bowl but the company plans to switch to having them chosen by a computer.

The article states that the Lottery keeps a $25 million reserve for odd situations. They also have further protections agains events like this one. On the back of the ticket we read

In unusual circumstances, the set prize amount may be paid on a parimutuel basis which will be lower than the published prize amounts.

Evidently the Lottery officials decided not to use this option in this case.

DISCUSSION QUESTIONS:

(1) How do you calculate the probability of getting the 5 basic numbers but not the bonus number correct?

(2) How many tickets would you have to sell to expect about 110 people to get the five basic numbers but not the bonus number correct?

(3) (2) Do you think that the sales of fortune cookies will increase?