Buying Lotto Tickets – Are State Lottery Games Good Bets?

Lottery Tickets

I get lots of questions about the value of lottery tickets. Most people want to know, “Are lottery games good bets?”

I think some state lottery games are perfectly fine. I don’t know if they’re “good” bets. That depends on your definition of good. What I’ll say is that lottery tickets are very affordable, they have large top prizes with long odds, but they also pay out smaller rewards more frequently than the headline-garnering jackpots.

Also, I think purchasing a lottery ticket is just as valid a way to bet as pulling the arm of a slot machine or spinning a roulette wheel. Lottery players understand the risks involved and aren’t spending money they can’t afford to lose.

This post is all about answering the most popular odds-related questions about US state and multi-state lottery games.

Odds of Winning Lottery Games

Everyone is obsessed with big lottery payouts. Newspapers love lottery stories, good and bad. There’s a TV series chronicling the highs and lows of “life after the lottery.” Groups of friends sometimes sit around and shoot the breeze about what they’d do if they won.

Let’s talk a little about the odds of winning the lottery.

People hoping to win the Powerball lottery are facing really long odds. Powerball is currently the biggest multi-state game, available in 45 states and three territories. The prizes get really big—$1.56 billion in 2016, divided among just three winners.

If you want to hit a huge payday on a single $2 Powerball ticket purchase, you’ll have to match five numbers plus the Powerball. Your odds of winning are 1 in 292,201,338. That’s similar to the odds of drawing two straight flushes in a row in a poker game.

Looking for the Mega Millions jackpot? The largest one ever was $1.6 billion, claimed by a single winner who took home a massive lump sum of $1.1 billion. This game’s jackpot odds are even tougher to beat than Powerball, at 1 in 302,575,350.

Let’s put that into perspective. According to Gregory Baer, your odds of being named a saint are 1 in 20 million. So, you’re far more likely to be canonized than to win the Mega Millions top prize.

Of course, those are just the odds for the game’s top prizes. Lottery players aren’t only seeking a life-changing payday. Any victory is good. Powerball’s overall prize odds are just 1 in 25. Your odds of winning any prize in Mega Millions is slightly better at 1 in 24.

One of my favorite state lottery games in terms of odds is the New York Take 5, drawn twice a day. For $1 a ticket, you have decent overall odds of winning, 1 in 8.77. I also love that the top prize is a 1 in 575,757 situation, the lowest of any state lottery jackpot in America.

That’s about the same odds as drawing a royal flush in poker. It’s rare, but it occurs. That top prize is worth an average of $57,575, which is a big payoff for a $1 investment.

Can I Buy Millions of Tickets to Guarantee a Win

I once read a novel in which one of the characters figured out that all you have to do to guarantee a winning lottery ticket is buy millions of entries. Think about it: If the odds of winning the Powerball are 1 in 292 million, surely, you’d hit the jackpot if you bought 292 million tickets.

It would work, but it would be impossible. Since Powerball tickets cost $2, you’d have a total outlay of $584 million. So, you’d want to wait until the jackpot got significantly higher than that amount. It’s hard to imagine a person willing to spend that amount of cash on lottery tickets, but maybe there’s someone.

Lottery Numbered Balls, Three Lottery Ticket Icons

Okay, so you’ve got the money. How are you going to buy that many tickets? If it takes 10 seconds to get a ticket, that’s 33,000 or so days’ worth of ticket printing.

Even if you divide that up among 10,000 people, each buying tickets for 80 straight hours, you’ll have to pay them for their time. That’s $8 million at $10 an hour. Imagine trying to write that many checks.

The plan is a mess, and I hope that little scenario has been illustrative of the problems of buying enough lotto tickets to guarantee a win.

Are Lotto Tickets Good Bets

Okay, so not all lottery prizes carry ridiculously long odds. How do lotto games compare to other bets, like those in the casino or the racebook or whatever?

I don’t think it’s fair to compare lottery tickets to games like slots or blackjack. For one thing, they’re played differently, in different contexts, and at vastly different costs.

The average lottery ticket buyer in America spends $4 to $5 a week on the games, according to the most recent numbers available. That’s not a lot of money. We Americans spend more on coffee ($39 a week) and about the same amount on video games ($3.94 a week) as we do on lotto tickets.

Average gambling budgets are higher than average lottery ticket budgets, just look at this budget breakdown for a trip to Las Vegas. This is important because, for most of us, the purchase of $4 worth of lottery tickets a week doesn’t represent a real financial risk. Casinos are going to take a lot more than $4 from the average slots gambler or blackjack fanatic.

I don’t want to ignore that casinos offer lots of bad bets, too. Spending an hour playing keno against a house edge of like 30% is a much bigger risk than a typical lottery budget. Even at $1 per bet and considering the relatively slow pace of keno at 10 decisions per hour or so, you’re looking at $10 an hour, which is almost three weeks of lottery play for the typical American.

Beating the House Edge With Lottery Tickets

First, let me say it plainly, there’s no real way to literally beat the house edge on a casino game or when playing the lottery. The games are designed in such a way that the venue eventually offering the bet will claim its profitable share.

Mega Millions Lottery Tickets

However, I do think there are habits you can learn that help you avoid the worst of the lottery’s built-in house edge. You can think of these as ways to increase you’re the entertainment value of your lottery ticket purchases.

Tip #1 – Buy More Tickets

Obviously, more tickets mean more chances to win. In a sense, this means you should “bet max” on every lottery drawing you participate in.

Figure out how much you can comfortably lose on lottery tickets each week, then buy that number. The more, the better.

Obviously, your odds of winning are the same, but with 10 or 20 entries per drawing, you’ve got 10 or 20 chances against those long odds.

Tip #2 – Play in Less Popular Markets or Those With Better Odds

Games with smaller numbers of participants technically give each player better odds of winning the top payout, though the size of the playing audience also limits the value of that top prize.

If you really want to play lottery games that have better odds, you can look this information up and focus your lottery play in those markets where the numbers are more in your favor.

As of the time of writing, Massachusetts offers the best return percentage on its state lottery games, an average of just under $0.80 per dollar spent. The West Virginia Lottery is at the opposite end of this spectrum, returning just over $0.10 for every dollar spent on its games.

The other four US state lotteries with the best return percentages are:

  • Arkansas ($0.70 per dollar spent)
  • South Carolina ($0.69 per dollar spent)
  • Minnesota ($0.68 per dollar spent)
  • Georgia ($0.66 per dollar spent)

Tip #3 – Play Games With Second Chance Draws

Second chance draws and other lottery games allowing bettors another opportunity to win with a ticket are becoming more popular. The idea originally came from casino keno games, the game most similar to traditional lottery draws.

In states with second-chance games, such as Texas and Massachusetts, losing tickets have another shot at a prize, though the rules and payouts involved still vary a lot from market to market. Extending the value of a losing ticket is a great way to cut into the house edge against that first ticket purchase, though it does require an additional investment of your time.

Our Final Thoughts on Playing the Lottery

Played responsibly, lottery games are a lot of fun. If the amount you spend is worth the thrill of potentially winning it all, I don’t see any problem with an adult spending their money on a state or multi-state lottery ticket game.

For $1 or $2, people can help fund education or road construction in their state and earn a shot at a profit, whether the prize is a free quick pick or $1.6 billion.

The purpose of this post is to take some of the sting out of the lottery, demystify it a little bit, and show that in certain situations lottery play is no different from casino gambling.

Look for lottery games with decent odds and buy as many as you can afford. Don’t forget to take part in any second chance opportunities that are available. And don’t fall for the gambler’s fallacy of numbers being hot or cold. Good luck playing your favorite lotto games.