Update. I have a more recent post calculating the expected value for the January 13, 2016 Powerball drawing.
Today, a lot of people are buying Powerball tickets for the first time. After all, the estimated jackpot is $550 million!1 But is their “investment” a smart bet?
After reviewing the Powerball odds and prizes page, it might seem so. Using the estimated jackpot, the expected value for a $2 ticket is $2.42.
So buy a ticket if you want an infinitesimal chance at winning.4 But don’t waste your time buying two. After all, although the first ticket increases your odds an infinite percentage from zero, the second ticket merely doubles your odds.
Good luck! You’ll need it…
- Cash value is actually “only” $360.2 million. But still — $550 million. That’s more than half a billion dollars!! ↩
- The probability of multiple winners is not zero, especially when millions of tickets are being bought. You can improve your odds of avoiding duplication by going for the quick pick. These are more random than choosing “personal numbers,” which are likely to be limited to numbers 31 and lower. ↩
- The odds of paying taxes on this are virtually 100%. Knowing how to avoid them is above my pay grade. ↩
- After all, if you want to get struck by lightning, you should be out standing in a field. ↩