Jackpot
lotteryThe top prize in a lottery or slot machine, often accumulating over time until won.
Key Takeaways
- 1Jackpots are top prizes that often grow progressively
- 2Even massive jackpots are usually -EV after taxes and splitting
- 3Theoretical +EV requires jackpots over $1.1 billion for Powerball
- 4More players at high jackpots increase splitting probability
What is a Jackpot?
A jackpot is the top prize in a lottery, slot machine, or other gambling game. Many jackpots are progressive, meaning they grow over time as a portion of each bet is added to the prize pool until someone wins.
Progressive Jackpots
Progressive jackpots increase with every bet placed. When the jackpot grows large enough, it can theoretically create a +EV situation — though the odds remain astronomical.
Lottery Jackpot Math
For Powerball with a $500 million jackpot:
- Odds of winning: 1 in 292,201,338
- Ticket cost: $2
- Expected value = ($500M × 1/292M) - $2 = -$0.29
- But after taxes (37% federal + state), lump sum (~60%), and potential splitting:
- Realistic EV ≈ -$1.20 per ticket
When Jackpots Become +EV (Theoretically)
A Powerball jackpot would need to exceed ~$1.1 billion (after accounting for taxes, lump sum, and ticket splitting probability) to be theoretically +EV. But even then, the variance is so extreme that it's not a practical strategy.
The Jackpot Trap
Large jackpots attract more players, increasing the probability of splitting. This is why the "jackpot becomes +EV" theory rarely works in practice.