His possible net winnings are 

gain
 or
loss    probability
---------------------      
$298    1/500 = .002
$198    1/500 = .002
 $48    3/500 = .006
 -$2  495/500 = .990




So he would average losing 70 cents if the same lottery were
held many times and he bought one ticket each time. 

-----------------------

This equals the value of the ticket if the ticket were free.

If the ticket were free you could not lose money.  Then
the lottery would be like this:

gain
 or
loss  probability
      
$300    .002
$200    .002 
 $50    .006



So a fair price for the ticket would be $1.30

Edwin