Why Mega Millions Ticket is Good Bet
Baku, March 30 (AZERTAC). The Mega Millions multi-state lottery is now advertising a jackpot of $540 million for Friday`s drawing. The cash value of the jackpot is $387 million, a more accurate estimate of the present value of the prize. The jackpot has accumulated because there has been no winner for 18 consecutive drawings - since January 24th. This means that those of us who buy Mega Millions tickets for the first time this week have been subsidized by the millions of players who contributed to the jackpot over the past two months.
The probability of correctly selecting all six numbers for Friday`s drawing is one in 175 million. It is likely that there will be multiple jackpot winners. Even after taking this into account, the expected value of a one dollar Mega Millions ticket is more than a dollar.
About 18 cents of every dollar collected from Mega Millions sales are used to pay consolation prizes. Another 32 cents of each dollar goes into the cash jackpot. The cash value of Friday`s drawing is estimated to be about $127 million higher than in Tuesday`s drawing. In other words lottery officials expect about 400 million lottery tickets to be sold between now and Friday.
If lottery officials are correct there is a 90% chance that someone will pick the winning numbers on Friday, and the expected number of winners, conditional on the jackpot being awarded, is about 2.5 This means that even after splitting the jackpot, the expected value of a Mega Millions ticket is about $1.23 (including 18 cents in expected consolation prizes).
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