The estimated jackpot for tonight’s Mega Millions state lottery (California, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas, Virginia, and Washington) drawing is up to almost $400 million.
The lottery has deservedly been called a stupidity tax, but how does this record jackpot change things? The odds of any specific ticket winning are 175.7 million to one. That gives a naive expected value of about $2.25 for each $1 ticket. Not bad, eh? Why not take out a short-term $175.7 million loan, purchase 175.7 million different tickets, and make a nice quick profit of $220 million or so? It’s easy money.