The Anatomy of a Good Bet

Turning $65 into $12,000: Positive EV Asymmetric Payoff

You might have heard that purchasing lottery tickets is a bad idea, and that you are almost certainly going to lose money on it. However just because it gives you an improbable chance of hitting the jackpot, doesn’t mean it is a mistake.

If it was, then purchasing insurance would be a bad decision given how infrequent claim events occur. Purchasing home insurance is quite literally the definition of betting for your house to burn down, so that you win a large payout…