Cornelius Nelan, professor of mathematics in the College of Arts and Sciences, said the odds of successfully picking the six numbered balls, five from a vat of 56 balls and one from another vat of 46 balls, and winning the top prize is 175 million to 1. On the bright side, he said the odds of winning would be substantially lower – nearing the realm of impossibility – if the correct numbers had to be selected in the order they are drawn.
“The lottery is doctored so that the states make money,” Nelan said. “In general, only 29 cents on the dollar are returned as winnings to the players. After expenses, the state makes a profit of about 50 cents per dollar played. Despite the large payments, the Mega Millions game is more profitable than other games, like scratch-off tickets.”
“Fortunately for players, there is more than just one way to win. If you select five balls correctly, but not the Mega Millions ball, you would receive a $250,000 prize. Your odds of doing this are 3,819,816 to 1,” Nelan said. “If you successfully choose the Mega Millions ball, you will win some prize, ranging from $2 to $10,000, depending on how many of the other balls you choose correctly. The odds of that are 45 to 1. There is actually a 1 in about 40 chance of winning some prize”
Nelan said there are a number of other things to consider, including potentially splitting the winnings with other winners, whether to take a lump-sum payout or getting paid over time. The lump sum would be about 55 percent of the nominal value of the prize.
If you are the sole winner of the $500 million prize, you will receive a payment of $1,925,000 (before taxes) per year for the next 26 years, or a lump sum of about $275 million.
Both options have drawbacks, Nelan said.
Among them: Winners must consider inflation rates when being paid over time and reduced pay-outs when being paid a lump-sum. Nelan said he recommends being paid over time, so that you are not tempted to spend it all too quickly.
Categories: College of Arts and Sciences