DES MOINES, Iowa — Is $810 million worth $2?
That’s a good question, considering it costs $2 to buy a Mega Millions lottery ticket, which could pay off with an estimated $810 million prize — the nation’s fourth-largest jackpot — after the game’s next drawing on Tuesday evening.
NOT AN OBVIOUS QUESTION?
Not exactly.
Let’s start by saying that your chance of winning the jackpot is slim to none, one in 302.5 million. You have a better chance of a smaller win, such as winning $1 million for matching five regular numbers but missing the Mega Ball. But even that is one in 12.6 million. To put that into perspective, your chance of dying in a car accident — something to keep in mind while driving to the convenience store for a lottery ticket — is about one in 101 over a lifetime, according to the nonprofit National Safety Council.
As Lottery officials note, players should think of their $2 bet as a chance to dream while accepting the reality that they probably won’t be entering a new tax bracket Tuesday night.
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YET AN $810 MILLION VIEW COSTS $2
Ah, but even if you somehow beat the odds, you won’t get $810 million.
First, it is the amount for winners who take the annuity option paid out over 30 annual payments. But winners almost always choose cash, which for this drawing would have paid out about $470.1 million.
And then there are federal taxes, which will cut 37% of that prize money, leaving less than $300 million, although state taxes can also cut that amount, depending on where the winner lives. Still a state, but less of a state. It also doesn’t take into account the possibility of someone else matching the winning numbers, meaning you’ll have to split even those smaller wins in half or more, depending on the number of lucky winners.
ALMOST $300 MILLION DOLLARS IS NOT CHANGE
It’s definitely a big salary.
To put this into perspective, consider that the median household income in the US in 2020 was $67,500, meaning a lifetime of work at that rate would be less than 1% of even the smaller jackpot after taxes.
But unfortunately, if you had won the same prize a year ago, before the nation endured a year of around 9% inflation, your purchasing power would have been significantly higher.
BUT SOMEONE WILL WIN
Ultimately though, the reason the jackpot grew so big is because no one has matched all six numbers since April. That’s 28 consecutive draws without anyone winning the jackpot.
With so many people playing now that the potential jackpot is so big, it’s becoming increasingly likely that one or more players will finally end this streak. Past prizes have gotten bigger, though, with the biggest win being a $1.586 billion Powerball jackpot won in 2016.
Mega Millions is played in 45 states as well as in Washington, DC and the US Virgin Islands. The game is controlled by state lottery officials.
SO IS IT WORTH BETTING $2
If you’re having fun dreaming of huge windfalls that most likely won’t blow your way, buy a ticket. But if you need to keep track of your money, consider keeping $2 in your wallet.
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