How Likely is it to Win the Lottery Jackpot?

The top prize in the Powerball lottery is now up to $1 billion, with a cash option of $516.8 million, and the jackpot is turning even skeptics into hopeful believers. But how likely is it to win?

It turns out, pretty darn unlikely. In fact, the odds are around one in 292.2 million. That may sound shocking, but it’s a lot less than the odds of getting bitten by a shark or winning the Super Bowl. The reason these eye-popping jackpots are able to sway people is because of a basic misunderstanding of risk and reward. “Humans just fundamentally have a very, very difficult time understanding risk when it’s things that are very rare,” says Victor Matheson, an economics professor at the College of the Holy Cross.

This is partly because of something called the availability heuristic, which means people tend to overestimate how likely an event is when it comes to situations that are easy to imagine, such as winning the lottery. And that’s why we see so many images of winners jumping and cheering and fist-pumping when they hit a mammoth jackpot.

When you actually win, though, it’s a different story. The actual amount of money you’ll receive is often much less than what was advertised. That’s because the vast majority of jackpot winners opt for an annuity payment that will pay them a smaller lump sum every year for about 30 years. This is because they’re more interested in the immediate payout, and because the annuity payments will increase by about 3% annually.