There are 1000 possible outcomes (from 000 to 999).
Then, the probability of winning is: 1/1000 = 0.001
And the probability of losing is: 999/1000 = 0.999
The net profit is computed as follows:
net profit = winning prize - cost to play
net profit = $394.46 - $1.35
net profit = $393.11
The expected value is computed as follows:
E = probability of winning*net profit - probability of losing*cost to play
E = 0.001*$393.11 - 0.999*$1.35
E = -$0.96