Re: The lottery. The odds.
there's also money payed out to non-jackpot winners. Grab one of the pamphlets, it has the odds of winning for each prize spelled out pretty clearly. Without figuring in taxes and lump sum penalties, it becomes +EV at a little over 100 million assuming you don't split (i had the numbers figured out at one point, but don't have them in front of me).
I think however that the value of that money goes down as the prize gets higher. Winning 5 million dollars radically changes your life. If you won 5 million more after that, it would be great, but not life changing... the second 5 million is worth less to you than the first.
So i'm not sure EV calculations are a great way to go with a huge jackpot like the powerball, unless you're part of a group that would split any winnings.
edit: powerball has absolutely been +EV a few times. Even with taxes penalties and chances of splitting, when it gets well over 200 million there's really no question.
|