DES MOINES, Iowa (AP) — The Iowa Department of Agriculture has issued a statement. Is $810 million really worth $2?
That’s a fair question, given that a Mega Millions lottery ticket costs $2 and has a chance to win an estimated $810 million — the country’s fourth-largest jackpot — following the game’s next drawing on Tuesday night.
IS THIS NOT AN OBVIOUS QUESTION?
Not at all.
To begin, your chances of winning the ultimate prize are one in 302.5 million. You have a higher chance of winning a smaller prize, like as $1 million for matching five standard numbers but missing the Mega Ball. Even so, it is one in 12.6 million. To put that in context, according to the nonprofit National Safety Council, your lifetime risk of dying in a car incident is one in 101.
According to lottery officials, participants should look of their $2 stake as a chance to dream while embracing the fact that they are unlikely to reach a new income tax bracket Tuesday night.
STILL, A SHOT AT $810 MILLION APPEARS TO BE WORTH $2.
But even if you miraculously overcome the odds, you won’t win $810 million.
First, it is the sum paid over 30 yearly instalments to winners who choose the annuity option. However, winners almost usually choose cash, which for this drawing is projected to be $470.1 million.
Then there are federal taxes, which will take 37% of the cash award, leaving less than $300 million, though state taxes may also be deducted, depending on where the winner resides. It’s still a wealth, but it’s a lesser fortune. That also does not take into consideration the likelihood that someone else would match the winning numbers, which would require them to divide even lesser prizes in half or more, depending on the number of lucky participants.
NEARLY $300 MILLION IS NOT LITTLE CHANGE.
It is unquestionably a hefty salary.
Consider that the typical U.S. household income in 2020 was $67,500, implying that a lifetime of employment at that rate would be less than 1% of even the smaller jackpot after taxes.
However, if you had won the same reward a year before, when the country had a year with an inflation rate of almost 9%, your purchasing power would have been much higher.
The top reward has eventually become so huge because no one has matched all six numbers since April. That’s 28 straight draws without a jackpot winner.
With so many people participating now that the possible top prize is so high, it’s becoming more probable that someone or more players will ultimately break the streak. Nonetheless, previous jackpots have risen in size, with the largest payout being a $1.586 billion Powerball jackpot won in 2016.
Mega Millions is available in 45 states, Washington, D.C., and the US Virgin Islands. State lottery authorities supervise the game.
IS IT REALLY WORTH GAMBLING $2?
Buy a ticket if you enjoy fantasising about a large windfall that is unlikely to come your way. However, if you need to keep track of your money, retain the $2 in your wallet.