In business (lotteries and casinos included), the owner wants to ensure that the business makes a profit. So that expected value (average profit) is always more than the expected loss (customer wins/payout). Why would this be? This week we learn about the expected value (mean) of a probability distribution. This would apply to casinos, horse or car races, bets on athletic events, etc.
Google your state’s Powerball or megamillions and calculate the probability of winning the jackpot. Most sites report odds instead of probability, so you’ll need to do a simple conversion.
Share a link that takes us to the odds information on your state’s Powerball or megamillions.
Answer the following:
Create a probability table for this distribution
What is your expected gain or loss from playing?
If you played 100 times how much would you expect to win or lose?
After looking at this information and doing a few calculations, would you play? Why or why not?
Is it binomial? I’ll leave this for you to investigate and explain.
