Ben Kinney, JD
This past week one lucky individual won a huge $750,000,000 Powerball. But what would it take to assure a win? The odds of winning the Powerball are 1 in 292,000,000 (roughly). There are 292,000,000 possible number combinations and, of course, only one combination is the winning combination. Tickets are sold for $2.00 each. To buy every possible combination you would have to spend $2 x 292,000,000 or $584,000,000. If you had $584,000,000 you could guarantee that you would win the Powerball.
The $750M that you would win is greater than the $584M you would spend to get there, but there are three caveats. First, the cash option is only $465M. However, the jackpot increases with every ticket purchased by about 34% of the ticket price. If you spent $584M on tickets, the jackpot would increase by almost $200M. Additionally, owning every number combination would mean that you would also be the winner of every other (non-jackpot) prize as well, which adds up.
The second catch is that someone else might also have the winning number combination, meaning you would have to split the jackpot with the number of winning tickets. But there is a workaround. In our thought experiment upfront money is not a concern (if you can afford $584M you can afford anything). A person could buy every possible number combination him or herself multiple times. This would necessarily mean that you would have multiple winning tickets, which would dilute the percentage split with anyone else. For example, if you bought each combination 99 times, a single other winning ticket would only be left with 1% of the jackpot.
Finally, there is the issue of taxes. Federal and State taxes can eat up to 45% of your winnings. That would almost certainly make this endeavor not worthwhile, except that the tax code allows you to deduct gambling losses (up to the amount of winnings). The great majority of your purchased tickets would be deductible losses meaning we’re only getting taxed on the profit and not the actual winnings.
Regardless of your strategy, winning a lottery gets immediately complicated by a number of legal considerations. If you were to win, be sure to seek legal advice prior to collecting the prize money.
image cred: ksfy.com
