Ironic Hopes: Is the Lottery Ever a Smart Bet?
I like to gamble from time to time, but I used to be one of those people who never played the lottery. The odds are too steep, and I would often tease friends and family about it. In my old office, people would collect money to buy tickets when the jackpot got big. When someone came around, my stock reply was: "You guys will need someone to laugh about when you win and you're on a cruise somewhere."
But then my wife got pregnant.
Yes, I was ecstatic. I was also thinking about astronomical tuition costs and all of the other expenses of raising a child. So I began playing the lottery occasionally when the prizes got big. My story is apparently typical. I read a guide for expectant fathers that said that many men in my shoes take stabs at the easy money.
When I remember to buy tickets-fortunately, I often forget-my "system" is to play one quick pick and another with sentimental numbers. If the jackpot gets so big that it appears to beat the odds, I buy a few more tickets.
My thinking is this: The chance for the Mega Millions jackpot is about 176 million to one. If the prize goes over $176 million, the odds are in my favor. If I had the money and time to buy every combination, I would collect an even larger jackpot, plus all of the other winning numbers, which would be additional millions.
Chuck Strutt, the brains behind MUSL, which runs Mega Millions and Powerball, said there are two possible complications to this. One of them-someone else picks the winning numbers-I have considered. The other risk is "folks coming after you with pitchforks and torches for buying out their game," Strutt, the founding leader of the Multi-State Lottery Association, wrote in an email.
My wife wants to buy an island if we ever win so we'd be safe from the mob.
But if you can afford to bet exorbitantly, does it pay? It turns out it probably does.
Split pots are not that common, and even if it does happen, you have two hedges to limit the damage. If you bought every combination of PowerBall at the new higher price of $2, it'd cost about $350 million. By buying so many tickets, you'd increase the jackpot by over $112 million, since nearly 32 percent of every ticket goes to the top prize. Eighteen percent covers the other winnings, which means you'd be guaranteed $63 million for other tickets with enough correct numbers, according to the payout info Strutt sent me.
So on the off chance someone else also had the winning ticket, you'd recoup about $294 million (half the larger jackpot plus the $63 million on other tickets) and "only" lose about $56 million on your $350 million investment. But if no one else hit and the jackpot started at $350 million before you bought tickets, you'd win at least $175 million on top of your investment, an almost 50 percent return.
You'd probably also win more, since buying so many tickets would no doubt hike ticket sales. Last weekend, the Powerball jackpot jumped by $15 million in about 24 hours after if got over $300 million.
So it may be smarter, or at least less foolish, to only buy when the jackpots are really large. Unless you've got the hundreds of millions to gamble, it's of course wisest to limit your losses as much as you can. I found two websites where you could simulate playing Mega Millions twice a week for 10 years; my lucky numbers pulled in $66 on a $1,040 investment the first time and $102 the second.
So what about last weekend's $325 million? As I'm sure you've realized, I wasn't the one who beat the 176 million to one odds. My chances were even steeper since I got to the counter after the lottery closed. I was also hungry and, coincidentally enough, I ended up spending $2 on a snack.
I got what I paid for and it filled me up.
Josh Rogers, contributing editor at Manhattan Media, is a lifelong New Yorker. Follow him @JoshRogersNYC.
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