Des Moines, Iowa — Is $810 million worth $2?
That’s a good question, given that it costs $2 to buy a Mega Millions lottery ticket that could pay off with an estimated $810 million, the nation’s fourth-largest prize, after the game’s drawing Tuesday night.
Isn’t that an obvious question?
Not really.
For starters, your chances of winning the jackpot are minuscule, one in 302.5 million. You have better odds of a smaller win, such as winning $1 million for matching five regular numbers but losing the Mega Ball. But even that is one in 12.6 million. To put that into perspective, your lifetime chance of dying in a car accident, something to keep in mind when driving to the mini-mart for a lottery ticket, is one in 101, according to the non-profit National Security Council.
As lottery officials point out, players should think of their $2 bet as a chance to dream while accepting the reality that they likely won’t enter a new income tax bracket Tuesday night.
Still, it looks like an $810 million opportunity is worth $2
Oh, but even if you beat the odds somehow, you won’t get $810 million.
First, this is the amount for winners who take the annuity option, paid over 30 annual payments. But winners almost always go for cash, which for this drawing would pay an estimated $470.1 million.
And then there are federal taxes, which will reduce 37% of that prize money, leaving less than $300 million, and state taxes could reduce that amount as well, depending on where the winner lives. It’s still a fortune, but a smaller fortune.
This also doesn’t take into account the possibility of someone else matching the winning numbers, meaning you’d have to split even those smaller winnings in half or more, depending on the number of lucky players.
Almost $300 million is not chump change
It’s definitely a great salary.
To put this into perspective, consider that the median household income in the United States in 2020 was $67,500, meaning that a lifetime of work at that rate would be less than 1% of even the highest award small after tax.
But unfortunately, if you had won the same prize a year ago, before the nation endured a year with an inflation rate of about 9%, your purchasing power would have been significantly higher.
But someone will win
Finally, though the reason the jackpot has grown so much is because no one has matched all six numbers since April. That’s 28 consecutive draws without anyone winning the prize.
With so many people playing now that the potential top prize is so big, it’s becoming more and more likely that someone or several players will eventually end that streak. Still, past prizes have grown, with the biggest payday being a $1.586 billion Powerball jackpot won in 2016.
Mega Millions is played in 45 states as well as Washington, DC and the US Virgin Islands. The game is overseen by state lottery officials.
So is $2 worth playing?
If you’re having fun dreaming about a huge windfall that probably won’t go your way, buy a ticket. But if you need to watch your money, consider keeping the $2 in your wallet.
- In:
- Mega Millions
- lottery
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