

Subject:
Lottery Payouts
Category: Miscellaneous Asked by: dillbillyga List Price: $2.00 
Posted:
01 Jul 2004 19:45 PDT
Expires: 31 Jul 2004 19:45 PDT Question ID: 368773 
Given the propensity for multistate lottery payouts to be massive, i.e. hundreds of millions of dollars, what lump sum payout would, after taxes, guarantee a profit if one were to buy every number combination possible? This assumes that there is only one winning ticket sold for either the powerball or the mega millions lotteries.  
 


There is no answer at this time. 

Subject:
Re: Lottery Payouts
From: corwin02ga on 02 Jul 2004 07:24 PDT 
Mega Million jackpot Odds of Winning MATCHING NUMBERS PRIZE ODDS 5 White Balls + MEGA BALL JACKPOT** (per $1 play) 1:135,145,920 5 White Balls $175,000 1:2,649,920 4 White Balls + MEGA BALL $5,000 1:575,089 4 White Balls $150 1:11,276 3 White Balls & MEGA BALL $150 1:12,502 2 White Balls & MEGA BALL $10 1:833 3 White Balls $7 1:245 1 White Ball & MEGA BALL $3 1:152 0 White Balls & MEGA BALL $2 1:88 Hence you would need to invest $135.145.920 dollars since price money is taxed at about 40% the jackpot would have to be $225.243.200 to break even and this is assuming there are no double winners and you are willing to take the anuity payout otherwise the odds get even worse 
Subject:
Re: Lottery Payouts
From: dillbillyga on 02 Jul 2004 07:34 PDT 
Your math is slightly off. When taking the lump sum payment you don't recieve the full amount, but rather an amount that has been adjusted for the devaluation of the dollar due to inflation over the 26 to 30 years of the payout plan. 
Subject:
Re: Lottery Payouts
From: corwin02ga on 02 Jul 2004 07:48 PDT 
I quote from myself and this is assuming there are no double winners and you are willing to take the anuity payout otherwise the odds get even worse Ergo ! 
Subject:
Re: Lottery Payouts
From: hailstormga on 03 Jul 2004 08:40 PDT 
You would also need to take into account all of the time and effort that would go into purchasing every lottery ticket. You would need to know how many lottery tickets a particular agent can churn out in a 24 hour period. Assuming that this is far less than the number required, you would need multiple people working at multiple agents to assure that all possible tickets could be purchased...and I imagine that they would not do this simply out of the goodness of their hearts! Bottom line, purchasing every lottery ticket possible is not a winning strategy, at least until the jackpot exceeds a billion dollars. 
Subject:
Re: Lottery Payouts
From: dillbillyga on 03 Jul 2004 09:33 PDT 
This was intended as a purely hypothetical question. It would be impossible to actually buy all 135 million numbers in the four days between drawings. And, if you had read my original question I assumed that there was only one winning ticket sold. 
Subject:
Re: Lottery Payouts
From: summer95ga on 03 Jul 2004 16:38 PDT 
The jackpot would need to be about $375 million just to break even. This assumes a cash payout, which is around 60%, and being taxed at about 40%. It's also quite doable in terms of covering the board and financing the project. You'd need 10,000 people with $13,500 each. (10,000 x $13,500 = $135,000,000) Each person would need to work 8 hours a day for 3 days filling out their share of the tickets. That works out to 9.38 picks per minute which is quite easily done. I'm thinking that each person would want to at least double their $13,500 and at least cover for the contingency of two winning tickets, hence the jackpot needs to be $750,000,000 to make it worth the risk. 
Subject:
Re: Lottery Payouts
From: hailstormga on 04 Jul 2004 18:55 PDT 
The recent Mega Millions jackpot of approximately $290,000,000 was won by one person in Massachusetts. According to the Boston Herald, a lump sum payment of this amount after various taxes would be around $117,000,000, about 40% of the announced jackpot amount. So summer95's figures seem reasonably accurate. 
Subject:
Re: Lottery Payouts
From: chrisward1000ga on 07 Jul 2004 12:17 PDT 
One of the main problems would be amassing a big enough team to buy all the tickets because if you go to one shop where they sell lottery tickets, it won't be able to print out enought tickets fast enough in the allotted time. 
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