The Odds of Winning a Lottery Prize Are Not As Good As You Might Think

When state lotteries began in the immediate post-World War II era, they were widely hailed as a way for states to expand their social safety nets without especially onerous taxes on the middle and working classes. State politicians were eager to take advantage of the new source of revenue, and the public seemed enthusiastic about playing.

Now, many people play the lottery on a regular basis, and for a small investment of a few dollars they can dream about a huge jackpot that could bring them instant riches. The popularity of the game may be driven by an inextricable human impulse to gamble, but it is also fueled by a meritocratic belief that everybody has a shot at becoming rich.

The odds of winning a lottery prize are not as good as you might think. Most of the time, winning numbers are chosen in clusters, meaning that if you choose a group of numbers with similar patterns (such as birthdays or sequential digits) there is a higher chance that more than one person will pick the same numbers and split the prize. Harvard statistics professor Mark Glickman says if you are going to buy lottery tickets, try buying Quick Picks, which are picked randomly and have a smaller chance of duplicate numbers being selected.

Moreover, when lotteries advertise a large jackpot amount, that sum doesn’t actually sit there in a vault waiting for the winner to claim it. Instead, the prize pool is calculated based on what you would get if the current jackpot were invested in an annuity that paid out in annual payments for 30 years. The result is that the vast majority of winners will never see that full sum, and those who do will likely forgo a modest investment in lottery tickets for an income that will be substantially less than they might have earned had they saved the money they spent on tickets.