There is a simple thought experiment that often gets brought up when discussing lotteries: Why don’t rich people just buy all the possible number combinations for a given lottery drawing, thus guaranteeing a win? It seems like such an obvious strategy – spend a few million dollars to buy every ticket and then win hundreds of millions in return. Yet in practice, we never see this happen. So why not? There are a few key reasons.
The Cost is Prohibitively High
Buying all the tickets for a lottery drawing would be extremely expensive. Let’s take the Powerball lottery in the United States as an example. Powerball has 69 regular numbered balls and 26 Powerball numbered balls that are drawn each week. That means the total number of ticket combinations is 69 x 69 x 69 x 69 x 69 x 26 = 292,201,338 possible tickets. At $2 per ticket, buying every combination would cost $584,402,676.
While a billionaire could theoretically afford this, it would still be an enormous upfront investment. And buying all the tickets would only guarantee a win for that one drawing. To guarantee wins on a consistent basis, the cost of buying every combination for every drawing would add up to billions of dollars every year. Even the wealthiest individuals would likely find that prohibitively expensive.
Splitting the Jackpot
Even if a rich person could afford to buy every ticket combination, they would still have to split the jackpot if there were multiple winning tickets. Lottery jackpots are pari-mutuel, meaning the prize is split equally among all winning tickets.
So if two people had tickets that matched all 6 Powerball numbers, each winner would receive only half the published jackpot amount. For a headline $500 million jackpot, each winner would get $250 million before taxes. Given the high upfront investment required, splitting the jackpot substantially reduces the return on investment.
It’s Illegal
In most jurisdictions, it is illegal for any single individual or entity to purchase all the tickets in a lottery drawing. Lottery rules typically prohibit this kind of bulk purchase of tickets by one person or group. The intent is to give everyone an equal and fair chance at winning and prevent rigging of the game. Someone trying to buy up all possible ticket combinations would be violating lottery regulations.
It Draws Attention
Anyone buying up such a large share of the available tickets would draw significant attention and scrutiny. Lottery administrators would notice the anomaly in sales patterns and likely investigate to ensure there was no fraud or manipulation happening. Even if it was legal, a large bulk purchase would be subject to intense public and media interest. Most wealthy individuals avoid that kind of attention and like to keep a low profile when it comes to personal finances and wealth.
Reasons a Rich Person Might Try to Buy All Lottery Tickets
Even with the obstacles outlined above, there are some reasons a wealthy individual may consider trying to buy an entire lottery drawing:
Ego and Competitive Nature
Some ultra-rich people have big egos and a competitive nature. “Beating the lottery” could be seen as an attractive challenge. Even if the practical financial gain was limited, the prestige and bragging rights of cornering the market on a billion-dollar jackpot would appeal to certain personalities.
Gambling Addiction
For people with addictive personalities, especially gambling addiction, logic often goes out the window. The thrill of winning a huge prize can override practical considerations about cost and likely return on investment. Even if they understood the slim odds of coming out ahead financially, a gambling addict may be compelled to try cornering the lottery.
Money is No Object
For the small handful of billionaires with massive wealth, a few hundred million dollars may not be a deterrent. Even a low chance of a positive return on investment could be attractive if the upfront cost was largely inconsequential to their net worth. Of course, most billionaires became wealthy in the first place through prudent business and financial management, not reckless gambling.
Personal Vendetta
In rare cases, someone may want to try to rig or corner the lottery out of a personal grudge or vendetta against the lottery organizers themselves. An attempt to embarrass or sabotage the lottery commission by proving the game could be bought would take precedence over money in this scenario.
Boredom
The ultra-rich often struggle to find meaningful ways to spend their time and money. After you have your every material need and desire already met, spending $600 million on lottery tickets could seem as reasonable an amusement as any other. Trying to corner the lottery could provide novelty and excitement.
Reasons Rich People Don’t Buy All Lottery Tickets – A Deeper Look
While personality quirks and unique circumstances may motivate the occasional rich person to attempt buying an entire lottery drawing, most don’t consider it a wise use of money. Here are some expanded reasons why purchasing every ticket combination is extremely rare:
The Odds Are Still Astronomical
Even cornering the market on ticket sales only accomplishes so much in tilting the odds in your favor. Let’s return to our Powerball example:
- Total ticket combinations: 292,201,338
- Tickets purchased by one player: 292,201,338
- Odds of winning: 1 in 292,201,338
As you can see, the odds are still extremely low for any player. Spending $584 million for only a 0.00000034% chance of winning is not smart gambling. The risk massively outweighs the potential reward. While guaranteeing you will have the winning ticket sounds attractive, your odds of actually hitting the jackpot in a given drawing remain incredibly slim. Long odds means you would likely need to spend exorbitant sums over many years before achieving a win.
You Could Still Lose Money
If the jackpot amount was on the lower end, purchasing all ticket permutations may not cover the upfront costs. In our example, the bare minimum jackpot is $40 million. After splitter and taxes, the winner may walk away with around $15 million. That’s a significant net loss from the $584 million invested in tickets. On a really small jackpot, the winner may end up in the red even accounting for smaller secondary prizes won.
Most Wealthy People Prefer Steady Returns
Individuals with large capital reserves got rich primarily by making safe, calculated investments that yield steady, lower-risk returns over time. Things like stocks, bonds and real estate. Attempting to rig the lottery is the definition of a high-risk gamble, something shied away from by most serious investors and money managers. Even if a few million doesn’t seem like much to a billionaire, it goes against the mindset ofmaintaining and stewarding wealth responsibly. Jackpots are alluring, but not to the financially disciplined.
Plenty of Other Entertainment Options
The bored billionaire argument may hold some water, but there are countless other ways to spend money on entertainment with far better returns. For a fraction of the money it would take to buy all lottery tickets, the wealthy can already afford unlimited luxury travel, new super-yachts, expensive hyper-cars, private jets, luxury penthouses, and everything else imaginable. Trying to corner the lottery would be one of the least efficient and highest-risk ways for a rich person to get their entertainment thrills.
It Draws Unwanted Scrutiny
Wealthy individuals go to great pains to minimize public attention. Reports about their personal finances and lifestyles are kept private. Running attack ads, maintaining multiple residences, hiding assets and income sources, and other tactics are employed to avoid scrutiny. Something as public and sensational as attempting to buy an entire lottery drawing would result in a media circus. Even someone with nothing illicit to hide would find that level of attention distracting and damaging to their privacy.
Would Buying Lottery Tickets be Profitable For a Billionaire?
We’ve examined many angles on why the wealthy don’t buy up lottery tickets. But playing devil’s advocate, under what conditions could trying to rig the lottery potentially be profitable for an individual with almost unlimited resources?
Key Factors:
- The lottery must have extremely long odds to allow jackpots to grow very large
- There can be no secondary prizes apart from the jackpot
- The ticket buyer must remain completely anonymous
- Payout after taxes must be larger than the upfront ticket cost
- The buyer must be willing and able to invest billions per year with no guarantee of success
Essentially, the lottery must be structured in a way that allows jackpots to routinely grow into the hundreds of millions or billions, without players having decent odds of winning smaller prizes. The winner must be able to avoid splitting the jackpot. And the profit after tax has to exceed the total upfront investment. The buyer has to be patient and relentless, persisting through years and years of no jackpot wins before finally hitting.
This combination is extremely rare. Some lotteries do reach those billion dollar jackpot levels on occasion, but it takes specific game conditions and long streaks of no winners. Having no smaller prizes helps the jackpot roll over more frequently. But it also means that the ticket buyer doesn’t recoup any of their investment if they lose.
Realistically, cornering the lottery only makes financial sense under a very specific set of circumstances that apply to practically no actual lotteries currently in existence. The potential reward has to massively outweigh the monumental risk and upfront costs. For almost any real-world lottery, buying all the tickets is a fool’s errand even for the wealthy. The odds are not in your favor.
Ethical Considerations
Beyond just the logistics of trying to corner the lottery, there are ethical considerations:
Fairness
Allowing one player to buy such a disproportionate share of the available tickets arguably violates the spirit of a fair lottery system. Rigging the game undermines public trust.
Reduced Proceeds for Public Services
Lottery profits are often earmarked for schools, infrastructure, senior services and other public benefits. One person winning huge jackpots repeatedly could substantially reduce this funding source.
Potential for Embezzlement
A rogue employee or lottery official could try redirecting funds to help someone attempt to buy all tickets. This type of corruption needs to be guarded against.
Appearance of Exploiting the Poor
Lotteries rely heavily on less affluent players. A rich person zooming in to snatch jackpots using wealth and privilege doesn’t sit right with many. The optics are concerning.
Like any complex issue, there are reasonable arguments on both sides here. But extra caution should be taken anytime a lottery system can be manipulated to favor any one group over another. Commonsense safeguards and rules should exist.
Possible Changes to Prevent Lottery Cornering
If cornering lottery drawings ever did appear to become a serious issue, legislators and lottery commissions have options to adjust the game rules and mechanics:
Capping Maximum Tickets Per Person
This would prevent any single player from buying an excessive number of tickets. A limit such as 100 tickets per draw per person has been proposed. This would make acquiring any sizable fraction of all combinations impossible.
Increasing Ticket Price
Increasing the standard ticket price to $5 or $10 makes acquiring all combinations prohibitively expensive for even more lotteries. A Powerball ticket at $10 would mean covering all combinations costs over $2.9 billion.
Starting Jackpots Higher
Current minimum starting jackpots of $40 million already limit profitability of cornering tickets. But increasing minimums to $100 million or more guarantees the cornering investment required is that much higher.
Frequent Drawings
More drawings per week decreases how much the grand prize can grow between drawings. This reduces the potential upside for a ticket buying whale.
Larger Number Pool
Expanding the total number pool – say, to 100 numbers instead of 69 – increases the number of permutations exponentially. At some point, buying all combinations becomes practically impossible.
No Jackpot Rollovers
Resetting the jackpot to the minimum each draw instead of letting it roll over prevents the massive jackpots a cornering scheme would depend on.
Splitting Jackpots Automatically
Always splitting a jackpot equally among multiple winners (real or otherwise) makes cornering less attractive by lowering the potential payout.
Key Takeaways
Here are the key reasons and considerations around wealthy individuals attempting to buy all possible ticket combinations for a lottery drawing:
- The cost to purchase all combinations is extremely high for nearly any lottery
- Having to split the jackpot greatly reduces return on investment
- Attempting to corner a lottery is illegal in most jurisdictions
- It draws unwanted public scrutiny and attention from regulators
- The odds of hitting the jackpot remain incredibly long even with all tickets purchased
- Wealthy individuals prefer steady returns over high risk gambling
- There are countless better entertainment options for the rich
- It is only potentially profitable under very specific, rare conditions
- Important ethical concerns exist around fairness, public trust, and appearing to exploit less affluent players
- Rule changes could quickly eliminate any cornering threat
In summary, attempting to rig the lottery by buying all possible ticket combinations makes little practical or financial sense in most real-world scenarios. While fun to fantasize about, cornering a lottery drawing only seems plausible to the average person unfamiliar with the logistics and statistics involved. With so many barriers and downsides, virtually no wealthy individuals seriously consider pursuing this strategy. The lottery ultimately remains an extremely long shot for even its biggest players.
Conclusion
Rigging the lottery sounds like a dream scenario – spend a few million dollars to win hundreds of millions in prizes. Yet when the logistics are examined, it quickly becomes apparent why buying up all possible ticket combinations is not a winning strategy for the wealthy. Prohibitive costs, long odds, split jackpots, legal restrictions and other roadblocks render lottery cornering financially irrational in most cases. While fun to imagine, practically no rich people pursue this route. The ultra-rich became wealthy by making shrewd, calculated investments, not reckless gambling. Attempting to corner the lottery contrasts sharply with the careful approach taken by most individuals who managed to build and maintain sizeable wealth over time. The lottery will likely remain a game of chance winnable by any random player, not just those with near unlimited resources. This helps maintain public interest and engagement. Regulators and lottery commissions are prepared to quickly close any loopholes if a fair drawing process ever became jeopardized. In the end, even the rich have to content themselves with buying just a ticket or two and hoping to get extremely lucky.
