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Strategies for playing the Mega Millions and Powerball lotteries
There are two key strategies for playing the Mega Millions and Powerball lotteries.
What makes these two lotteries stand out is the astronomical odds of hitting the jackpot. The odds are 1 in 146 million for Powerball and 1 in 176 million for Mega Millions. Both lotteries started out with much lower odds but as more US states were added to their respective jurisdictions, the odds were increased.
Because of such huge odds, the expected value of these lotteries do not approach a reasonable level until the jackpots are over $300 million. The expected value is the total sum of all payouts in relation to the respective odds of each payout. Therefore, the best strategy for playing Powerball or Mega Millions is with group play. First, wait until the jackpot is over $300 million, and then try to join the largest group possible for buying tickets.
It is important to note that the advertised jackpots are annuities paying over 25 to 30 years. Therefore a $300 million jackpot has an approximate $100 million after tax, cash value. Using the $300 million jackpot as an example, 50 people pooling together $10 each will have enough money to buy 500 tickets. The odds of winning the jackpot then becomes a somewhat more reasonable 1 in 351,423 for Mega Millions and 1 in 219,216 for Powerball. Each member of the group still wins $2 million - an amount that only a few years ago was the typical size a lottery jackpot.
The corollary to the group play strategy is that an individual should never play the Mega Millions or Powerball lotteries on their own. The odds are way too long. Let all the other players build up the jackpots and then play as a group when the jackpots are large.
This brings us to the second strategy.
The jackpots for these lotteries reach a large amount only once a year on average. Both the Mega Millions and Powerball jackpots were over $300 million for only 3 draws in the past 3 years. A certain amount of patience is required is use the first strategy described above. That is why this second strategy is so important.
Given a group play opportunity comes along only once per year, you will want to take advantage of it to the fullest extent. That is, you want to buy as many tickets as reasonably possible.
The above example of 50 people buying 500 tickets as a group will be used to illustrate the strategy. First, we will use Powerball in our example. There are 42 Powerball numbers. A ticket matching the Powerball number wins a minimum of $3. With 500 tickets, each Powerball number can be played 11 times each. Therefore by playing each of the 42 Powerball numbers 11 times, one is guaranteed a win of $33. Then why not spend the $33 now while the jackpot is large and buy a total of 533 tickets. It does not end there, though. The additional $33 to spend allows us to cover each Powerball number a total of 12 times for a guaranteed wins of $36. In summary, the group is able to buy a total of 536 tickets with $500 given they are guaranteed to win at least $36.
Now for the same example using Mega Millions. There are 46 Mega Ball numbers. A ticket matching the Mega Ball number wins a minimum of $2. With 500 tickets, each Mega Ball number can be played 10 times each. Therefore by playing each of the 46 Mega Ball numbers 10 times, one is guaranteed a win of $20. By adding the $20 to the $500 allows each Mega Ball number to be played 11 times. In summary, the group is able to buy a total of 522 tickets with $500 given they are guaranteed to win at least $22.
The strategy is to maximize the number of tickets purchased for the given once-a-year opportunity by covering each Powerball number or Mega Ball number as many times as possible and pre-spending the amount that is guaranteed to be won.
A group needs a minimum of $39 to use this strategy for Powerball and a minimum of $44 to use this strategy for Mega Millions.