here's an overlay...

The Powerball drawing is up to 200 million and is slated to be an 80 million to one shot. Just in case anyone is looking for a +EV bet...

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x

post tax would be 110 million... slight overlay

80 mil to 1 is true odds last i heard, the estimate for the pot is 280 taxes = 50% for highest bracket, that includes, federal, state & city (NYC and SF), will be lower if you live in Scranton, PA $280*.5= $140 million. not too bad..but that means you need to have higher than a 50/50 chance of winning by yourself and not tieing...and what if you win, but tie 3 ways!


anyways, none of these numbers matter...it doesn't even matter if its overlay or not. what matters is that $100 mill, $50 mill, $140 mill, $30 mill, or whaterve it will be, would surely change just about everybody's lifestyles, even to those who have $5 mill.

How about the cost of your time if you have to spend an hour or more in line for the ticket? Your overlay is tiny and once again most people are ignoring the truth about your odds of a tie. If you were to buy the only ticket in this drawing then yes you would have an overlay. But with the prize going up about $90 million in a week that means they are anticipating around 300 million tickets to be purchased (about 30% of the pot goes to the big prize). Since its 80 million-1 that means 4 winners is the mathematically most likely outcome. The states keep about 35% for themselves so that means you are essentially getting about 35% in value for this draw ($100 million) and the $280 million. So about $380 million for your 80 million-1 shot. Then take that most of the value of prizes awarded are paid over time so discount that $380 by 40% and you see this isn't an overlay, even before tax considerations.

You better pray you have the only winning ticket.

With 4 winners, adjusting to today's dollars the winners got about $40 million each. Assuming a 40% tax they get about $24 million. Adding in the 'other' prizes the return per ticket was about 52 cents. I guess the prize needs to be a whole lot bigger to positive expectation.


Danny