Today, the Powerball jackpot stands at a whopping $700 million. If nobody wins tonight, and that’s incredibly likely, the next round of jackpots is almost certainly going to top the record-breaking $1.6 billion haul. But while we idly dream about lump sum vs. annuity and buying yachts, nobody ever asks why the Powerball jackpots are breaking so many records. It turns out that it’s not more people playing the lottery: Powerball is working the odds to boost the jackpot and sell more tickets.
The Washington Post points out something causal lottery players likely missed: Powerball, in October of 2015, drastically upped the odds of winning the main prize, from an already unlikely 1 in 175 million to an even harder to hit 1 in 292 million. As a trade-off, it became easier to win a prize; getting just the Powerball nets you $4, and that’s a 1 in 38 shot. But nobody plays Powerball to double their money.
Why would Powerball work the odds? To sell more tickets, of course. In 2014, lottery tickets were seeing a decline in sales thanks to “jackpot fatigue” and the spread of casinos. That’s a bigger problem than you might think: At least some lottery money goes to state budgets, and states can ill afford any dent to their revenue. Higher jackpots tend to draw “jackpot chasers,” people who don’t normally buy a ticket but will start buying tickets when the jackpot hits a certain threshold. Just take a look at this breakdown of the current jackpot. Between last Wednesday and last Saturday, when the jackpot went from $430 million to $535 million, more than 58 million tickets were sold across America, nearly twice what Powerball sold building up to this jackpot.
To some degree, a change in the odds doesn’t matter much. On a practical level, 1 in 175 million and 1 in 292 million are basically the same chance: You probably aren’t winning. But as jackpots spiral ever upward, with Powerball inflating them even further to grab your attention, keep in mind that the real game being played is on you.
(via The Washington Post)