Is playing PowerBall currently +EV???

[skiier04]

At a $1 ticket, approx 1:140million odds of winning, and a $340 million grand prize it seems like it should be. Am I missing something here because I dont really think it is...

Heres the odds of winning:

http://powerball.com/powerball/pb_prizes.asp

[cardcounter0]

Yap. You are missing Federal, State, and Local taxes. You are also missing the fact that you don't get $340 million. You get a twenty year annuity with a present value that is worth far less, or a big discounted lump sum (minus the previously mentioned Federal, State, and Local taxes). You are also not factoring in the small chance of someone else winning and splitting the prize.

[MCS]

It's not +EV, but you should play anyway because you want to.

[skiier04]

Current Jackpot:

$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev???

F it im playing but I still wanna know the answer.

[SheetWise]

[ QUOTE ]
$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev??? F it im playing but I still wanna know the answer.


[/ QUOTE ]
You're playing with tax free dollars, calculate your winning in tax free dollars. 164.4MM * .6 = 98.64MM if you're the only winner.

[chunk]

[ QUOTE ]
[ QUOTE ]
$ 340 Million
$ 164.4 Million Cash Value

If the cash value is 164.4 million doesnt that make it +ev??? F it im playing but I still wanna know the answer.


[/ QUOTE ]
You're playing with tax free dollars, calculate your winning in tax free dollars. 164.4MM * .6 = 98.64MM if you're the only winner.

[/ QUOTE ]


prize/ after 40% tax/ odds/ EV
$164,400,000 $98,640,000 1 in 146,107,962 $0.675
$200,000 $120,000 1 in 3,563,609 $0.034
$10,000 $6,000 1 in 584,432 $0.010
$100 $100 1 in 14,254 $0.007
$100 $100 1 in 11,927 $0.008
$7 $7 1 in 291 $0.024
$7 $7 1 in 745 $0.009
$4 $4 1 in 127 $0.032
$3 $3 1 in 69 $0.044

total EV===> $0.843

There is a bonus for second place winnings that makes this bet +. The grand prize is know to be 340mil, but the size of the second place bonus (now at 20 mil) has a much bigger effect on EV than the grand prize.

the effect of this 2nd place bonus is as follows and includes what would happen if the second place prize were split 10 ways. It's not really an EV analysis but gives an idea of the effect that the bonus could have on EV.

prize after 40% tax odds EV
$164,400,000 $98,640,000 1 in 146,107,962 $0.675
$20,000,000 $1,200,000 1 in 3,563,609 $0.337
$10,000 $6,000 1 in 584,432 $0.010
$100 $100 1 in 14,254 $0.007
$100 $100 1 in 11,927 $0.008
$7 $7 1 in 291 $0.024
$7 $7 1 in 745 $0.009
$4 $4 1 in 127 $0.032
$3 $3 1 in 69 $0.044

total EV===> $1.146

It's like having a layover of a well-paying state lottery on top of the grandprize.

[MCS]

[ QUOTE ]
F it im playing but I still wanna know the answer.

[/ QUOTE ]

Yeah, I knew that, which is why I wrote my post the way I did. [img]/images/graemlins/smile.gif[/img]

It's still significantly -EV because of (1) taxes and (2) the nontrivial chance of splitting the top prize even if you win. cardcounter0 explained this already.

[cardcounter0]

$ 164.4 Million Cash Value - Federal Taxes = $ 117 Million Cash Value
Now subtract State Taxes. Then subtract Local Taxes.

I would buy 7 tickets, because 7 is a lucky number.

[SheetWise]

[ QUOTE ]
I would buy 7 tickets, because 7 is a lucky number.

[/ QUOTE ]
Now, there's a strategy we can all get our arms around.

[img]/images/graemlins/wink.gif[/img]

[ QUOTE ]
It's not +EV, but you should play anyway because you want to.

[/ QUOTE ]

Guys...who gives a rats ass if it's a -EV. It's a HUGE pot that doesn't happen very often and to think of this as either a -EV or not is sense less. If you play and hit it even if you split the pot who cares, your going to be rich as hell and won't need to grind out any game you gamble at anymore.