You’ve probably heard about the huge Mega Millions jackpot. Right now it’s sitting at about $500 million. If you want the immediate cash payout you can get $359 million. That’s a nice chunk of change.
I don’t play the lottery because I have a degree in Mathematics. I understand how absurd the odds are and if I’m going to waste my money I want to do it on delicious food or video games or something else that gives me some kind of guaranteed return on my investment.
But wait. What if the lottery had a guaranteed return on investment? Let’s look at the numbers:
What If You Bought Every Ticket?
I’d rather not gamble, but what about a sure thing? What if you bought every single combination of lottery tickets, thus guaranteeing you would win the jackpot?
There are only 175,711,536 Mega Millions combinations. That means you could spend $175,711,536 to buy every single ticket, and obviously you can’t lose if you have every ticket.
Not only will you hit the jackpot, but you’ll also win all the smaller prizes, which will get you about $32 million.
Add $32 million to $359 million and you get $391 million. Sure, it cost you $175 million, and you’d have to pay taxes on the winnings of $216 million ($391M – $175M). You’d pay 39.6% in taxes on those winnings (plus state income tax if you have it), meaning you would end up with about $130 million in profit.
That’s right, it’s $130 million in profit. You can’t lose!*
*Well, You MIGHT Lose
There’s no question you’d hit the jackpot and win every other prize if you bought every ticket. The real question is how much the jackpot will be worth.
Remember that if two people hit the jackpot then it is split 50/50 for each winner. If three people have winning tickets, each person gets 1/3rd. The more winners you have, the less the jackpot is worth for each winner.
If only one other person hit the jackpot and you only got half of $359 million, you’d still come out ahead by about $24 million after tax. But if more than one other person hit the big one, you’d be in trouble.
With 3 jackpot winners you lose $19 million. With 4 jackpot winners you lose $49 million. It gets worse from there.
But let’s pretend you’re willing to take that risk. I mean, you’re betting on people NOT winning the lottery, which seems like a good bet. Let’s buy the tickets.
It’d Be Hard to Buy 175 Million Lottery Tickets
Buying every single lottery ticket would be pretty hard. First of all, you’d need exactly $175,711,536 dollars in cash. Good luck with that.
And even if you did have the money, you only have about three days to buy all the tickets (after the drawing on Tuesday and before the drawing on Friday). If you wanted to buy 175,711,536 lottery tickets in 3 days you’d have to buy:
- 58,570,512 tickets per day, or
- 2,440,438 tickets per hour, or
- 40,674 tickets per minute, or
- 688 tickets per second, or
- 1 ticket every 0.00148 seconds
The Real Odds of Winning the Mega Millions
Unfortunately our tiny human brains aren’t very good at understanding really big numbers. We understand what it means to have a 10% chance of winning, or a 1% chance of winning. However, we can’t easily grasp what it means to have a 1 in 175 million chance of winning. Let me put it in terms that are easier to understand.
If you want a 1% chance of hitting the jackpot on the Mega Millions, you would have to buy 500 tickets every single day for about 9.62 years.
Remember, that’s 500 tickets a day for almost a decade and you only have a 1% chance of hitting the jackpot. This is what they mean when they say you have a better chance of being struck by lightning.
Please Don’t Play the Lottery
I understand that a $359 million jackpot sounds exciting. To be perfectly honest, Tag and I each bought one Mega Millions ticket only because she had never played the lottery before and we thought it would be fun to talk about what we’d do with all that money. Basically we spent $2 to have a fun conversation (which is way overpriced considering you can do that for free anytime you want).
Some people think that if they just keep playing they are bound to win sometime. It’s not true. I’m okay with playing a few bucks once in a blue moon, but for the love of Peter Frampton please don’t play the lottery regularly.
Readers: I’ll spare you the $2. What would you do with $359 million dollars?