The lottery is the most widely played form of gambling, and the most expensive. Big lotteries pay back about half of what they take in.
Where your $2 goes
In Powerball, 50% of each drawing's sales goes into the prize pool. The rest goes to the states, retailers and running costs. EuroMillions works the same way: its prize fund is 50% of ticket sales.
That's an RTP of about 50%. For comparison, a slot machine typically returns 90–96%, and European roulette 97.3%. On average, a lottery ticket loses half its price the moment you buy it.
A weekly ticket over ten years
Buy one $2 Powerball ticket every week and in ten years you've spent $1,040. At a 50% return, you can expect about $520 back in small prizes, and to lose the other $520. Most of the prize money goes to the rare jackpot winners, so most players get back far less than half.
The odds
The chance of winning the Powerball jackpot is 1 in 292,201,338. The chance of winning any prize at all is 1 in 24.87, and most of those prizes are small amounts, often just the price of another ticket.
A huge jackpot doesn't change this much. More people buy tickets, so the chance of having to share the jackpot goes up, and the advertised amount is paid over decades. The cash amount is much smaller, and it's taxed.
Why people play anyway
For a couple of dollars, a lottery ticket buys a few days of imagining a different life. That's a real thing to enjoy, as long as it stays a small, fixed amount. The trouble starts when the amount grows. To see it as a yearly cost, use the calculator with "Custom" and an RTP of 50%.
Sources
- Colorado Department of Revenue: Lottery rules: Powerball prize pool (50% of each drawing's sales)
- Powerball: Powerball prize chart and odds
- Wikipedia: EuroMillions (prize fund 50% of sales)