What is the House Edge in lottery games?
Is the house edge in lottery higher?
Regardless of what your game of choice is, as long as it is based on luck it is essential to know which is the house edge. This determines your chances of winning and helps you focus on those outcomes that are most likely to generate profits. When it comes to lottery games, it is only fair to say that the odds of winning the jackpot are dismal and the house edge in lottery is higher than in any other game. Nevertheless, the prospect of winning significant amounts keeps players returning time after time and ensures the success of the lottery.
One chance in many millions
Those who step into a casino should know that the house always wins in the long term, despite the fact that the edge is usually not higher than a couple of percentages. Things change dramatically for lottery games, where the chances of winning are one in several millions, depending on how many numbers are drawn. The odds of winning the jackpot in a standard 6/49 Lotto game are one in 14 millions, so it is not reasonable to ever count on such profits.
Even second tier prizes are difficult to win and it is a big mistake to think that you are due to win just because the losing streak is very long. It is the exception to the rule for a player to win, and it is not unheard of lottery players who have purchased tickets their entire lives never to win a significant prize. Matching three or four numbers is more likely to happen but the prices hardly have the winner offset the losses suffered in the previous draws.
Taxes and fees further eat into profits
In addition to being huge underdogs when playing the lottery, players should be aware of the fact that only a fraction of the money they spend goes towards fueling the jackpot. Depending on the lottery, the percentage can be higher or lower than 50%, but the values are revolving closely around this number. For the lottery this is a foolproof solution of making sure that they always end up on the right side of profit, since there is no chance of awarding prizes larger than the amounts collected.
After winning the jackpot, one will see his prize shrink immediately by more than 30% as the state takes its share through taxation. Most lotteries offer the winners the opportunity of choosing between the annuity and the lump sum, with the latter incurring another significant loss. Despite the drawbacks, most lottery players prefer this solution which explains why in the end there is such a big difference between the initial jackpot and the amount they are actually awarded.
