Offered by the Ontario Lottery and Gaming Corporation (OLG), Poker Lotto is "a Watch 'n Win lotto game that features two chances to win!" 1. Instant Win - A poker game plays out when you buy your ticket 2. Nightly Draw - lotto numbers are replaced by playing cards from a 52 card deck. Your assignment is to find the expected value of a Poker Lotto Ticket. The probability of getting the winning hands for the instant win part of the ticket is given. Please note that the probabilities are given as percentages. The probability for the nightly draw portion must be calculated separately and is unrelated to the following percentages. Assume that a free ticket is worth $2. Hand Probability Prize Royal Flush 0.000154% $5000 Straight Flush 0.00139% $500 4 of a Kind 0.024% $175 Full House 0.144% $75 Flush 0.197% $50 Straight 0.392% $20 3 of a kind 2.11% $5 2 pair 4.75% $2 Pair of Jacks or 13% Free better Play!!! Questions 1. What is the value of the instant win portion of the ticket? 2. What is the value of the nightly draw portion of the ticket 3. What is the overall expected value of the ticket? 4. What is the expected loss that somebody will have when purchasing this ticket? 5. If you were able to double any one prize on the ticket (instant or nightly draw), which would lead to the biggest increase in expected value? Answers