As has been mentioned in previous articles, people from all demographics have a taste for gambling. As Personal Finance blogger, I may not seem like the type of person who is intrigued by lottery payouts, but here in the States the recent Mega Millions drawing was estimated at a lump sum payment of $462 million. If we assume a 1 in 176 million chance to win and a 50% tax rate, the expected value of a $1 lottery ticket seems to be $1.31! Additionally, losses are tax deductible against other gambling winngs (meaning that $1 may only cost you $0.75 or less) and a significant portion goes to fund state governments, very often in the form of education subsidies.
Is sports gambling beatable?
Casinos, over the years, have traditionally thought of sportsbooks as an amenity to offer to their customers as opposed to a real way to make money. They cap the bets made on traditional over/unders and to people who consistently win in sports gambling (known as ‘sharps’). The casinos believe that sports gambling is beatable by a select few and just hope that the losses of the masses can wash out the gains of the few. But, the obvious question is: if it is beatable, how does one stay ahead of the market/line-setters?
Here’s your thoughts for the day, not from me but from a new survey of economists. The American Economic Association was polled in the September edition of Econ Journal Watch. Find the raw numbers at Real Clear Markets.