Mark Gritter (markgritter) wrote,
Mark Gritter
markgritter

Lottery still -EV

Powerball is estimated at $500m (annuity) or $327m (lump sum) for Wednesday's drawing.

The jackpot odds are 1 in 175,223,510, so the EV of the lump sum payment is $1.87. The smaller prizes bump that to about $2.21, which looks good on paper for a $2 ticket. But the ~42% state and federal income taxes in Minnesota bring the net value down to about $1.28, even before estimating the probability of a split prize.

Unless, of course, you could put your lottery tickets into your IRA. :)
Tags: gambling, math
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