The Powerball jackpot has topped half a billion dollars. So at what point does it actually become a statistically smart play? Sorry, not this weekend. Not even close.
By the numbers, it may seem a reasonable investment: $2 to play. 1-in-175 million odds of winning. A $550 million prize. But the payout isn’t really $550 million – and there’s no guarantee the winner won’t be splitting the bounty.
The $550 million figure represents an estimate of the total 30-year payout for winners who choose an annuity option – an option that adds roughly $200 million in interest. (Powerball doesn’t actually know how much the figure will be until it seeks bids for the annuity after a win.) So the actual cash prize this weekend is currently estimated at $350.1 million.
That could still make it a break-even investment – if only Uncle Sam didn’t want his share. Even if you lived in a state with no income tax, the feds will grab about 39.6 percent of the dough. Now you’re down to a measly$211 million.
So best-case scenario: A $2 ticket that pays, on average, $1.21 back for the jackpot. And even then, only if there’s one winner.
So how high would the prize have to climb for Powerball to actually be a statistically supportable play? A jackpot topping $911 million – with all the other players not matching your luck.