How to Win the Lottery
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| Your best chance to win: Powerball or Mega Millions? Image source: Dr. Penny Pincher |
The only way to improve your odds of winning the lottery is to buy more tickets. For both Powerball and Mega Millions, the odds of winning the jackpot is about 1 in 175,711,536 per ticket that you play. That’s one chance in 175 million. Pretty long odds.
The good news is that there are two aspects of playing the lottery that you have control over that can help you without buying more tickets:
- Which lottery drawing you play
- Which numbers you pick.
Choosing the Best Lottery Drawing to Play
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| Lottery Ticket Scanner Image Source: Dr. Penny Pincher |
Each lottery drawing has its own set of tickets for a chance to win the jackpot. The jackpot amount varies depending on number of tickets sold and whether or not anyone has won recently. The jackpot continues to accumulate until there is a winner. The size of the jackpot affects the number of tickets sold. When the jackpot grows enormous, the lottery becomes front page news and many tickets are sold.
The Value of a Lottery Ticket
One way to decide the best time to buy a lottery ticket is by trying to estimate the “value” of a lottery ticket. For example, if the jackpot is $175 million, and your odds of winning are 1 in 175 million, then the value of a ticket is $1. This does not take taxes or inflation into account. Federal and State taxes will reduce the lottery jackpot payout that you keep by about 40%. If you prefer immediate payout rather than payout over a 30 year payout, this will reduce the jackpot amount by about 30%. Keep these reductions in mind when you see the "value" of a lottery ticket.Now let’s look at some real data. This is data I requested and obtained from the lottery office for the national Powerball and Mega Millions lottery drawings over a 2 year period. The graphs below shows the calculated “value” of a lottery ticket based on the jackpot amount divided by the odds of winning.
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| Mega Millions Ticket Value vs Jackpot Source: Dr. Penny Pincher |
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| Powerball Ticket Value vs Jackpot Source: Dr. Penny Pincher |
The Risk of Sharing the Jackpot
Based on this data, the best time to buy a lottery ticket is when the jackpot is largest. The big Mega Millions drawing for $640 million and the Powerball drawing for $587 million look like the best ticket buys, with a value of over $3 for a ticket that costs $1. One ticket buys a 1 in 175 million chance of winning the jackpot, no matter how big it gets. However, a big jackpot leads to more tickets sold. Why does this matter? The number of tickets sold does not affect your chance of winning the jackpot, but it greatly effects the chances of sharing the jackpot.
The plots below show the number of tickets sold vs the size of the jackpot.
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| Mega Millions Tickets Sold vs Jackpot Value |
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| Powerball Tickets Sold vs Jackpot Value Source: Dr. Penny Pincher |
We can calculate the odds of more than one winner based on the number of tickets sold and the odds of winning. The plots below show the odds of only one winner vs the number of tickets sold. You can see that when the number of tickets sold grows to more than 100 million or so, the odds that you will have to share the prize is about 50%. This significantly impacts the “value” of a lottery ticket.
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| Mega Millions Odds of 1 Winner vs Number of Tickets Sold Source: Dr. Penny Pincher |
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| Powerball Odds of 1 Winner vs Number of Tickets Sold Source: Dr. Penny Pincher |
How to Win the Lottery
The best drawings to play have a good “value” for the lottery ticket based on the jackpot size and odds of winning while also having a high probability of only one winner. Looking at lottery tickets from the perspective of return on investment, this is the best time to play. Unfortunately, the number of tickets sold does not seem to be published before the drawing, so the best you can do is look at historical relationship between jackpot size and ticket sales to estimate the number of tickets sold for the current drawing.
Best time to play to maximize ticket "value" based on jackpot size and odds of winning AND have low chance of sharing the jackpot:
Megamillions: Jackpot between $200-300 million
Powerball: Jackpot between $200-250 million
You want the lottery jackpot to be big, but not so big that the number of tickets sold make it likely to have more than one winner. For example, the big Mega Millions jackpot of $640 million on March 30, 2012 was split 3 ways. Not surprising since 531,721,271 tickets were sold. This very high number of tickets sold made the most likely number of winners 3, effectively reducing the "value" of a lottery ticket for this drawing by a factor of 3. The Powerball drawing on November 28, 2012 for $587 million had 2 winners- again, not a surprise since 563,131,974 tickets were sold. The most likely number of jackpot winners for this number of tickets sold is 3.
Keep in mind that we did not include taxes or the cost of receiving an instant payout vs a 30 year payout when calculating the "value" of a lottery ticket in the graphs above. When these factors are included, along with the risk of sharing the jackpot as more tickets are sold, the value of a lottery ticket is less than $1. However, choosing which drawing to play can increase the value of a lottery ticket by 2x if you choose wisely. It's worth thinking about. If you're going to play, you might as well maximize the value of the lottery ticket you buy.
Which Lottery Numbers to Pick?
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| Play Powerball! Image source: Dr. Penny Pincher |
The other aspect of playing the lottery that you can control is the numbers you pick. Most people play “lucky” numbers like birthdays, anniversaries, etc. These numbers range from 1 to 31. The Mega Millions and Powerball numbers on the lottery balls range from 1 to 56. If you pick numbers in the range of 32 to 56, you are just as likely to win and are less likely to have to share the prize if you win since fewer people play these numbers. However, many people use computer picks which choose from the full range of numbers. So you will also want to use the strategy above to choose drawings that have a high jackpot, but not so high that the number of tickets sold makes multiple winners likely.
How to win the lottery without buying lots of tickets, or at least improve the value of your ticket:
- Choose the best drawings to play in order to maximize the value of a lottery ticket
- Choose the best lottery numbers to reduce the chances of sharing the jackpot
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