Lotto & Luck
beginner8 min read
Powerball Odds Explained: What Are You Really Paying For?
A mathematical breakdown of every Powerball prize tier, the true expected value of a ticket, and what the jackpot needs to reach for it to be 'worth it.'
Powerball by the Numbers
Powerball is the most popular lottery in America. Let's break down exactly what you're buying when you spend $2 on a ticket.
The Odds
| Match | Odds | Prize | Expected Value |
|---|---|---|---|
| 5 + PB | 1:292,201,338 | Jackpot | Varies |
| 5 | 1:11,688,054 | $1,000,000 | $0.086 |
| 4 + PB | 1:913,129 | $50,000 | $0.055 |
| 4 | 1:36,525 | $100 | $0.003 |
| 3 + PB | 1:14,494 | $100 | $0.007 |
| 3 | 1:580 | $7 | $0.012 |
| 2 + PB | 1:701 | $7 | $0.010 |
| 1 + PB | 1:92 | $4 | $0.043 |
| PB only | 1:38 | $4 | $0.105 |
Total non-jackpot EV: ~$0.32 per $2 ticket
That means before considering the jackpot, you lose $1.68 on average per ticket.
When Is Powerball "Worth It"?
For the jackpot to make a ticket +EV, it needs to overcome:
- The $1.68 base deficit
- Federal taxes (37%)
- State taxes (0-13%)
- Lump sum discount (~40%)
- Probability of splitting
The Calculation
- Advertised jackpot needed: ~$1.1 billion
- After lump sum (60%): ~$660 million
- After federal tax (37%): ~$416 million
- After state tax (~5%): ~$383 million
- Expected value per ticket at 1:292M odds: $1.31
- But splitting probability at high jackpots: ~30%
- Adjusted EV: ~$0.92 — still negative
The uncomfortable truth: Powerball is virtually never +EV in practice.
So Why Do People Play?
- Entertainment value — The dream is worth something
- Skewness preference — Humans overvalue small chances of huge payoffs
- Social participation — Office pools, family traditions
There's nothing wrong with playing the lottery for fun. Just understand what you're paying for.