Jul 29, 2022 - Economy

America's new favorite pastime: The lottery

Value of lottery tickets sold, per drawing
Data: LottoReport.com; Chart: Erin Davis/Axios Visuals

Americans have wagered hundreds of millions of dollars on lottery tickets just in the past two days, catapulting a U.S. lottery jackpot to more than $1 billion for only the fourth time ever.

Why it matters: Millions of people have bought a ticket, dreaming of what they would do with a post-tax lump sum estimated at more than $600 million.

Between the lines: The amount that stands to be won — even after taxes — is greater than the amount being wagered, thanks to the fact that no one has won the MegaMillions jackpot since April 12. It has been rolling over ever since.

  • Statistically, that means this drawing is a rare positive-sum game — if at least one person wins the jackpot. But that is far from certain.

Catch up quick: The lottery is played in 45 states, plus the District of Columbia and the U.S. Virgin Islands. Out of each $2 ticket, roughly 35 cents goes to non-jackpot prizes, about 75 cents goes to fund the jackpot, and the remaining 90 cents goes to the government.

  • The chance of winning the jackpot — about 1 in 300 million — is statistically indistinguishable from zero. You're much more likely to be eaten by a shark, or struck by lightning, or even killed by an asteroid.
  • Don't bother buying two or more tickets: Ten times zero is still zero.

By the numbers: If 200 million $2 tickets end up being sold, then with 302,575,350 total combinations of numbers, there's still only about a 50% chance that any of the tickets is going to hit the jackpot.

  • If you are lucky enough to win, you also have a roughly 50% chance that you'll have to share the jackpot with at least one other person who chose the same numbers. (The $1.6 billion Powerball jackpot in 2016 was split three ways.)

Be smart: You're not going to win the lottery. But that's not the point. The point is that with your $2 you're purchasing the dream of being able to win the lottery.

  • Fantasies of dynastic wealth are one of the few things you can buy with $2 these days — a price that hasn't gone up since 2017.
  • The occasional dabble in the lottery can even save you money, if it scratches your get-rich-quick itch and means you're less likely to gamble in meme stocks or cryptocurrencies.

The bottom line: Don't feel guilty about spending $2 on playing the lottery this week. And if you want to keep the dream alive, simply don't check your numbers!

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