• December 1, 2022

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What’s a ticket worth? Something like $1.46.

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Today’s a good day for buying a lottery ticket. Or rather, today’s not as bad a day as most days.

After no jackpot winner in Saturday night’s drawing, the pot for the November 7 Powerball will grow to an estimated $1.9 billion. Your odds of winning the big one is 1 in 292 million. Divide one number by the other and you might guess that each $2 ticket has an expected payoff of $6.50.

But there are a few speed bumps on your road to the easy life.

First is that the advertised grand prize is a little misleading. That’s what the winners get if they take the money stretched over 30 years. With a lump sum option, the money is cut in half.

The official forecast is for tonight’s lump-sum payout to be $929 million. But I’m guessing that enough tickets will have been sold on Sunday and Monday to boost the prize just above $1 billion.

Next little problem is that yours might not be the only winning ticket. The risk of having to share the pot varies with the number of tickets sold; with 300 million tickets (my wild guess for the Monday drawing), the potential sharing erases a third of the apparent value.

And then there are income taxes. In the table below, I’m assuming a combined federal and state rate of 42%. Your situation may differ.

Add up all the damage and you find that the apparent $6.50 jackpot value of each Powerball bet shrinks to $1.28. The little prizes are worth another 18 cents. Total ticket value: $1.46. In other words, your expected loss on each ticket purchase is 54 cents.

That’s not bad, as Powerball bets go. After a jackpot win, the pot is reset at $20 million. The ticket value on days with that minimum jackpot is scarcely 22 cents.

Other things being equal, a Monday or Wednesday drawing is a better deal than a Saturday drawing. There are only two days rather than three when people are buying, and so competition for the jackpot is smaller.

In most states, there’s no sharing of the small prizes ($1 million and under) and so their values are fixed. California has a more complicated payout formula, so the small-prize values there are only estimates.

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