|Posted: May 24, 2004, 1:53 am - IP Logged|
The value of a lottery ticket is equal to the chance of winning multiplied by the average prize.
For example: A straight draw Pick-3 ticket has a 0.001 chance of winning, and the prize is $500 (in Illinois, anyway). Multiplying 0.001 by $500 gives a ticket value of 50 cents. Thus, when you buy a $1 straight draw Pick-3 ticket, you are paying a dollar for something with a value of only 50 cents. It's worth noting that both the Box-3 and the Box-6 tickets are only worth 48 cents; so, even though your odds of winning with a straight ticket are lower, the straight ticket is the better buy.
If you play MegaMillions (and exclude the jackpot, because it skews everything horribly), you have a 0.023399189557 chance of winning, and the average prize is $7.82. Multiplying these values gives a ticket value of 18 cents. Thus, when you buy a $1 MegaMillions ticket, you are paying a dollar for something with a value of only 18 cents (excluding the jackpot).
This does not mean it is foolish to play the lottery altogether; but it does mean that it's foolish to play the lottery for anything other than a major win. As Prof. Daverman said: Don't play to win, play for the dream of winning.
Where n is equal to the number of tickets bought, the odds of winning in the MegaMillions lottery is given by 1 - [(1 - 0.023399196957)^n]