How to Win the Lottery
I heard someone ask, "How do you win the lottery?", as if there were a strategy you could follow to guarantee success in a game of blind luck. After some consideration, though, I realized that there was a good answer to the question:
The reason lotteries exist is because they are profitable; in other words, they bring in more money than they pay out. If this was not the case, the lottery would go bankrupt and would not have enough cash to pay the winners. So, as a whole, the people who play the lottery lose money. The odds are just not in their favor.
Lotteries will often list the odds of winning as something like "1 in 36", meaning one ticket out of every 36 will win. What they mean by that is simply the odds of winning something. If you get a couple of matching numbers and win $3, that means you won something. And, in reality, almost every single winner in a lottery is of the single-digit variety: $3, $4, maybe $7. If you spend $36 on the lottery and buy 36 tickets, you will, on average, win one time, and that winning ticket will almost always be of the $3 or $4 variety. Congratulations, you just lost $33.
Of course, no one plays the lottery to win the $3 prize; they play to win the jackpot. The goal is to make an unfathomable amount of money so that you can retire and live on a beach somewhere and have servants hand-feed you whatever it is that rich people eat. That is why so many people spend billions, collectively, on lottery tickets each year. So what are the odds of really winning the lottery--you know, hitting the jackpot?
Oh, sure, people do win, occasionally. It can happen. But for all practical purposes, no, it won't happen to you.
Two of the biggest lottery programs, Powerball and Mega Millions, offer the really huge jackpots, with payouts that you truly could live off of for the rest of your life in millionaire style. The reason the jackpots are so immense is because, for the most part, nobody wins them. Millions and millions of people buying tickets across multiple states, and yet each lottery regularly goes weeks without having a single jackpot winner. How is that possible?
Don't worry, this isn't a conspiracy. The lack of winners is not only entirely possible, it is probable. The lottery commissions know that, usually, no one will win, because the probability of someone winning are so small. For Powerball, the odds of winning the jackpot with any given ticket are 1 in 146,107,962. For Mega Millions, the odds are 1 in 175,711,536.
Both of those work out to, essentially, zero chance.
Let me put that in perspective for you. There are, roughly, 290 million people in the United States. Two of those people are the movie stars Brad Pitt and Angelina Jolie. So, the odds that the next person who knocks on your front door is either Brad Pitt or Angelina Jolie are about 2 in 290,000,000, which is the same as saying 1 in 145,000,000. Which is about the same as the odds of winning the Powerball jackpot (1 in 146,107,962). Is Brad Pitt or Angelina Jolie going to knock on your door? Is there any remote chance of that at all? No? Well, that's the same odds you have of winning Powerball. With Mega Millions, your odds are even lower.
(Keep in mind, with this example, it has to be either Brad or Angelina. So, even if Tom Cruise or Katie Holmes were to knock on your door--which is, of course, not going to happen--but even if it did happen, you still would not have won the lottery. Also, it has to be the very next person who knocks. So, if your neighbor comes over to borrow your ladder, and then Brad Pitt shows up, you still lost. Thanks for playing.)
Still think you have any chance whatsoever of winning? Let's try some other examples. Do you, personally, have any shot of ever dating a supermodel? Well, you are 2,000 times more likely to date a famous supermodel than to pick a winning Mega Millions ticket (1 in 88,000). Ever been struck by lightning? Lucky you. It is over 250 times as likely as having the winning Powerball numbers (1 in 576,000). Remember the movie Armageddon? The odds of such an asteroid actually hitting Earth in your lifetime and killing you are estimated at 8,800 times more likely than winning Mega Millions (1 in 20,000). And that even requires the impossibility that Bruce Willis would actually fail at something.
Of course, that is all based on the odds for a single ticket. You might wonder, what if I buy multiple tickets? Won't my odds be higher? Well, sure, if you want to throw more money at an impossibility. The odds may change, but the expected return on your money is still the same.
Here's what I mean: if you want to buy more tickets and improve your odds, you could just go all the way and buy every possible ticket--all 175,711,536 number combinations in Mega Millions, for example. Then your odds of winning would be 1 in 1; you would be guaranteed to win the jackpot. Good for you! And it only cost you $175,711,536!
But wait--the payout is not normally $175 million. So, even if the jackpot is a respectable $50 million or $100 million, you just lost a lot of money. And even if the jackpot is $175 million, you still lost money, because you don't get to keep all of the jackpot. If you want the money now, and take the "lump sum" option, then your payout is barely more than half that amount: about $100 million. And that is before taxes. After tax, we're talking about $72 million or so. You just won the lottery, and lost over $100 million in the process. That's an investment return of -59%.
The only way to even break even in this scenario is if the jackpot is over $423 million--which is higher than the largest lottery jackpot, ever. And even then, if someone else also buys a winning ticket, you have to split the earnings.
In other words, trying to win the lottery is a losing proposition. It does not make sense financially, no matter how large the jackpot or how many tickets you buy, and the odds of picking the winning numbers are essentially zero.
As one final piece of evidence, I present to you this--one of several stories I have seen about people winning the lottery without even buying a ticket. Once in a great while, someone simply finds a winning lottery ticket. This means that, technically, the odds of winning the lottery without ever buying a ticket are greater than zero. Probably 1 in a billion, but still greater than zero. And since the odds of buying a winning ticket are also nearly zero, you could say that someone has about the same chance of winning the lottery whether they ever buy a ticket or not.
So, how do you win the lottery? Don't play.