Lottery Shenanigans Part II

Last time, we explored the idea of whether or not playing every number in the PowerBall lottery was profitable.

Turns out, though, that there were several errors in my original calculations. For instance, if you take the cash up front, you receive half the jackpot value. The annuity pays the full amount. Unfortunately, the annuity really is not a good option for someone trying to buy every ticket because of the massive up-front investment cost.

Another error was my omission of non-jackpot prizes, which turns out to be much more significant than I anticipated. If you read the comments, you'll see these prizes are very significant.

I have recalculated the value at about a 63 million loss if you take the cash payout and a 50% tax. It’s a 1.3 million loss if you take the annuity with a 50% tax. (I used 35% tax before, which is too low. Taxes pretty much are what finally kills the whole concept).

I was going to talk about what practical problems you'd face if you tried to buy every ticket. But since it turns out not to be profitable, its sort of pointless.

The main three problems you'd run into are The Money, The Legality, and Getting The Tickets.

Its not explicitly illegal, but there are problems, such as anybody you'd want to share the risk and profits with would have to be from the same state.

The money is a hard problem to overcome, if you don't already have it. (Impossible, I'd argue at this point, since its mathematically unprofitable).

Getting the tickets isn't any easier, since you have to go through licensed vendors. You'd either have to buy lots of lottery machines and print them yourself, which would cost a lot of money, or you'd have to buy online which is mostly illegal, and they probably have no way to facilitate your requests for 150 million sequential tickets in time for the next drawing.

So, I’d highly recommend against buying every ticket. You'd probably wind up broke and in prison.