Modern Living: FIGURING THE ODDS

“No one has a better chance than you,” blares the advertisement for New York State’s lottery. The slogan is not quite true. The government has a better chance of collecting a payoff than all the players put together, and it does not even have to buy a ticket. It keeps 45% of all the money invested on tickets. Another 15% is withheld to help cover operating costs, including 6% to ticket vendors and 1% for bank fees and bonus prizes to vendors. That leaves only 40% of the total take to be distributed in prize money. In other words, if somebody spent $1 million to buy up all the tickets in a hypothetical lottery, he would end up losing $600,000.

Of course, no one operates any form of gambling without extracting a commission. But the biggest bite is clearly in lotteries, and the biggest of all is New York’s 60%. Counting both the state’s cut and operating expenses, the takeout in Maine and Ohio is 55%; in New Hampshire, which started the legal lottery craze in 1964, it is 50%. To get a piece of what is left, a ticket buyer still has to compete with the number of other tickets against him. The odds for winning any prize are not good. In New York, for instance, the chances are 240,000 to 1 against collecting a $5,000 payoff.

States are not as greedy in their takeouts from parimutuel betting at horse and dog tracks. They generally skim off 15% to 17%, and some of that goes back to the tracks to help cover prize money for owners and other operating costs.

In casino games, the house gets its share through an edge in the odds. On Las Vegas roulette wheels, which have two zero spaces, the house benefits by 5.26%. (In Monte Carlo, where the wheels have only one zero, the house margin is 2.7%.) In blackjack in Vegas, the house has a basic advantage of 5.9%, though this can vary depending on the skill of a player. The best casino odds are in craps, where the house is only 1.4% better off than the player. Slot machines vary, keeping 3% to 22% of the coins they swallow.