[djehuty]

I think there's a reasonable argument for using the Kelly criteria, but leaving that question aside, the author misses a most important factor: the marginal utility of the money. If I am a millionaire, the upside of extra money is low, and the downside of losing all my money is high. If I am choosing between a cup of coffee and a lottery ticket, the upside (even divided by my chance of winning) is high and the downside low.

[dejb]

A agree with the importance of marginal utility but disagree with your 'marginal' maths. The pay off with these mega jackpots needs to be in the 10s of millions to make it positive net value. I'd argue that the marginal value of money starts to taper of considerably at around between $2m and $5M. So the extra say $35M of jackpot money won't really have as much value to you on top of the $5M you might normally win. So in marginal terms you are back to negative expectation.

Of course I think the marginal entertainment value is what gets most people playing.