## Thursday, March 29, 2012

### When Winning Lottery Numbers are a Sure Thing

If you go to the Mega Millions website, you'll see a few statistics about "America's biggest jackpot game". I went there because I wanted to learn how the money from ticket sales is split up between winnings, operating costs, etc. There was a bold graphic on the About Us page with the information I was seeking. The breakdown is (in approximations, of course, according to the description): 35% goes to fund government services in the participating states, 50% pays out to the winning tickets, and 15% is spent on retailer commissions and lottery operating costs.

The jackpot for this Friday's drawing is currently \$500000000. I like writing it without the commas; it looks like a lot of money that way. Taking a snap shot of the game on this Friday, assuming that there is a winner, and using the percentages above, we can figure that the amount of money taken in is (approximately) \$1000000000. One billion dollars.

I know that the game pays out on other prizes less than the top prize, but since we're talking approximations, I don't know how much those paltry amounts would change these extrapolations.

The states will divvy up \$35000000. There are forty-two states plus the District of Columbia participating in Mega Millions. Assuming that each of those states gets an equal piece of the pie (since I didn't want to spend hours researching more approximations), the take home for each state would come to \$813953.50.

That leaves \$15M for retailer commissions and lottery operating costs. I couldn’t find any readily available data on how much goes to retailer commissions. If it’s 50 percent of that portion (which is probably guessing on the high side), that would leave \$7.5M for the lottery operating costs.

There are many people rubbing their lucky socks in hopes of winning a slice of the Mega Millions pie, but people at game headquarters are looking at a sure thing.