So we hear that you may have bought a lottery ticket or two recently, hoping to maybe win big.
Hey – it could happen. It only takes one set of numbers to win, right? And somebody’s going to win the lottery eventually – it can’t keep growing forever without a winner, as that would end up decreasing sales if customers ever figured out that nobody ever wins.
That’s why we still bother to try, because while the chances of winning the lottery drawing are practically nil, it’s still a one in millions chance of hitting… and that’s better odds than not bothering to buy a ticket in the first place.
According to the MEGA MILLIONS ODDS page, there’s a 1:175million chance of actually hitting the lottery numbers.
But if you think about the lotto fever that happens every time the jackpot grows to a crazy sum of money, then there’s one other caveat to think about that could put your champagne dreams on ice for a bit longer:
The more tickets that are sold for these big drawings, the more likely it is that there will be multiple winning tickets that will split the jackpot, making your slice of the pie significantly smaller than it was in your daydreams.
That being said, it’s not like splitting a cash-valued $400 million prize with others will leave you with little more than cab fare, as any massive amount of money is worth more than $0 in the end. But how big of a split can you reasonably expect to see?
Using fundamental math principles, Jeremy Elson crunched some more numbers and determined that there was a 20% chance that there would be just a single winner in a giant $600 million jackpot. The odds of there being 2 winners increases to 26%, and then the odds start dropping as more possible winners emerge, with 7 winning tickets coming close to just 1% chance.
So why is all this important to note – and more critically, why you should have paid attention in school during math class? Because looking at the expected jackpot value and the overall odds of winning, you’ll eventually reach the same conclusion that Jeremy did – that this most recent lottery drawing had an expected value of a single game ticket to be about 97 cents.
In other words, for every $2 you spend on a lottery ticket, you can reasonable expect to make back about 97 cents. It’s the same math the casinos use to calculate their own payoffs, so none of this should be new to you. What’s most interesting about this is that the math works out so the best jackpot size for buying a game ticket is around $460 million. The expected values drop significantly at lower jackpot levels, and drop more gradually at higher levels — primarily due to the sheer number of tickets being sold that could win, thus diluting your own solo winning possibilities.
So go out and buy that lottery ticket when the mood strikes your fancy. Just remember that like all gambling, it’s always been a strict numbers game. Just be sure that those jackpot numbers are most in your favor when you step up to the counter with those $2 in your hand – you want to maximize your opportunity for winning potential at all times.
Be a smart gambler. Learn the math.