Lottery ROI Calculator
Some things to note off the bat:
- I can essentially guarantee you will never win the lottery. You have a 99.9999997% chance to lose.
- You don't actually get the advertised jackpot amount. You can get that amount spread out over the next 30 years or ~52% of that amount upfront. Which is better depends on your age and investment strategy.
- You have to pay taxes on your winnings, which will be essentially a flat 37% federally plus whatever state taxes you have.
- Gambling is taxed especially aggressively, meaning you essentially lose your standard deduction if you gamble a lot, even if you lose money.
- As you will soon see, it's a horrible investment strategy.
- If you have a gambling problem, get help.
With that out of the way, let's get down to the math.
Powerball
Currently the next Powerball Jackpot amount is $174,000,000. Taking the lump sum, you would get $79,700,000, less the $29,451,000 of federal taxes.
With 12,000,000 players…
…playing for the remaining $50,249,000…
…you would have an average ROI of 37% (including lesser prizes).
If only one person won, you would have an ROI of 38%. However this must be reduced because you would have a 4% chance of sharing the jackpot with another winner.
Mega Millions
Currently the next Mega Millions Jackpot amount is $60,000,000. Taking the lump sum, you would get $26,900,000, less the $9,915,000 of federal taxes.
With 10,000,000 players…
…playing for the remaining $16,985,000…
…you would have an average ROI of 25% (including lesser prizes).
If only one person won, you would have an ROI of 25%. However this must be reduced because you would have a 3% chance of sharing the jackpot with another winner.
Illinois Lotto
Illinois makes it very difficult to access data about its lottery and much of the specifics are not clearly disclosed. As best as I can figure though, the ROI goes from about 50% at the lowest jackpot of $2,000,000 up to about 71% at the highest jackpots of $20,000,000. Extra Shot seems to improve these ROIs by about another 20%.
The Illinois Lotto is essentially always a loss. Its floor is higher than national lotteries, but it wouldn't attain a ROI over 1.0 until roughly $45,000,000, which is almost three times as high as the jackpot has ever gotten.