$30 billion will purchase 15 billion tickets. The odds are 175 million to one, thus insuring 85 payouts if all the possibilities are covered. If the game was not pari-mutual, with a sharing of the jackpot, the minimum jackpot of $40 million would be paid out 85 times, for a total of $3.4 billion. The loss would be $26.4 billion compared to the jackpots. Of course there would be ancilliary payouts of the powerball, 2 of a kind, 4 of a kind with PB, etc. These typically amount to 20 cents on the dollar, so let’s call it another $5.3 billion on the $26 billion remaining, for a total payback of $8.7 billion on an outlay of $30 billion.
That sounds about right. Close enough for government work, that is.
But it’s a lot worse than this, because the jackpots are, in fact, shared, and we haven’t even mentioned that the cash option is significantly discounted.
So, it goes like this, I get to use other peoples' money ($30B) for me to end up with $4B. Or did I miss read that article. Ooooops, we aren't supposed to read anything until the bill passes.
Not only that, but, PowerBall is drawn 2 times a week. If you started buying tickets, say, immediately after the last drawing, there would not be enough TIME to purchase 15 billion tickets. Further, there is no guarantee that you would win UNLESS you submitted 175 million tickets, covering every combination possibility. And, there probably isn’t even enough TIME to do THAT...
You’re probably right but it’s clear to me that a lot of people don’t start playing until the jackpots are large (myself included).
In the most recent run, the jackpot didn’t grow faster than the $10M minimum until the 9th rollover. In the 15th rollover, the jackpot went from $325M to $587.5M.
So either the house wins (by playing its own game), or the jackpot rolls over, thereby attracting more players....I guess I’d try it on a smaller scale than $30B per round. Also I am conflating the federal government with the state governments.
What I’ve wondered....instead of putting current bets into the current jackpot, why not put current bets into the next jackpot? (As I understand it, they do some of that but not much).
I figure around 285M played the last round of the last big jackpot, and 30M played the Power Play. That put $332M into the prize pool.
About $132M was paid out on non-jackpot prizes.
So wouldn’t it be better to start the next jackpot at $200M rather than $40M? The $200M jackpot would already be funded, unlike the $40M jackpot.
Now yes, fewer people would play if the jackpot had been advertised at $325M the whole way rather than starting at $425M and then winding up at $550M, with the eventual jackpot being $587.5M.
It looks like around 14M played the 1st round of the next jackpot, with an additional 3.5M playing the Power Play, with $9.5M paid out in nonjackpot prizes.