Have you ever wondered what are the odds of winning Mega Millions or the Powerball lottery? We have the answer and the odds may not be in your favor.
As the Mega Millions and the Powerball lotteries accumulating jackpots of more than $350 million, many Americans are spending chunks of their hard earned paychecks on lottery tickets, hoping to get rich quick.
According to CNNMoney, in 2016, Americans spent more than $80 billion on lottery tickets. That’s more than they spend on movies, video games, music, sports tickets, and books — combined. So what exactly are your odds of winning Powerball or Mega Millions lotteries?
Odds of winning Powerball Lottery
The odds of winning Powerball are 1 in 292 million.
Odds of winning Mega Million Lottery
The odd of winning Mega Million are 1 in 259 million.
With that kind of odds, when you buy a $2 ticket lottery ticket, it would cost you $584 million to buy up every possible drawing for a guaranteed win.
Top states for sales of lottery tickets
The statistics below represent the annual sales of lotteries in the United States in 2016, by the state. New York is the number 1 state for all of the U.S. sales of lotteries which have reached approximately 9.69 billion U.S. dollars.
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How much are American spending on average for lottery tickets?
American adults spent an average of $251 on lottery tickets. With a return of 53 cents on the dollar, this means the average person threw away $118 on unsuccessful lotto tickets. I am not a mathematician professor, but that sounds like a bad investment. Furthermore, more than 5% of lottery winners declare bankruptcy within five years of taking home the jackpot.
Who is foolish enough to invest their hard earned money into such bad investments with poor returns? According to
The Consumerist, studies show that lower-income households spend their proportions of earnings on lotteries than do wealthier families. One figure suggests that households making less than $13,000 a year spend a full 9 percent of their income on lotteries.
1,900 jackpot lottery winners declared bankruptcy within five years
Economists at the University of Kentucky, University of Pittsburgh and Vanderbilt University collected data from 35,000 lottery winners of up to $150,000 in Florida’s Fantasy 5 lottery from 1993 to 2002. Their findings are as follows:
- More than 1,900 winners declared bankruptcy within five years, implying that 1% of Florida lottery players (both winners and losers) go bankrupt in any given year, which is about twice the rate for the broader population.
- “Big” lottery winners, those awarded between $50,000 and $150,000 were half as likely as smaller winners to go bankrupt within two years of their win, however equally likely to go bankrupt 3 to 5 years after.
- 5.5% of lottery winners declared bankruptcy within five years of bringing home the jackpot.
- The average award for the big winners was $65,000 – more than enough to pay off the $49,000 in unsecured debt of the most financially distressed winners.
So why are we spending so much on Mega Millions and Powerball despite almost impossible odds of winning the jackpots? Lotteries are a fun, cheap opportunity to daydream about hitting it big, escaping the rat race and the possibility of becoming an overnight millionaire or billionaire. Despite overestimating the odds of winning Mega Millions or Powerball lottery, Americans will keep playing and dreaming. As they say “Hey, You Never Know.”