If you feel like that you’re witnessing more and more lottery winnings surpassing the $1 billion mark, you’re definitely right.
The prize for Saturday’s Powerball drawing has surged by $1.6 billion, making it the most ever. It’s also the second billion dollar jackpot in 2022 after there were no winners of the top prize from the draw on Wednesday. This is the fifth time that a U.S. lottery prize has been digitized to 10 since 2016, when the first billion-dollar prize was revealed.
The rise in the number of jackpots is through design, according to experts that the chances of you actually winning a large jackpot are higher than ever.
Imagine this: If there is no one who is able to win a particular lottery draw, the money won gets carried over to the following draw which increases the size of the pot. It makes the lottery more difficult to win and you can almost guarantee higher jackpots on a regular basis by incentivizing more people to buy lottery tickets.
Powerball’s organizers are gradually making their lottery more difficult to win over time, says Victor Matheson, an economics professor at the College of the Holy Cross who studies lotteries.
The biggest change came in 2015, where the lottery added additional number combinations to nearly halve chances of hitting the jackpot. Before then, your odds of winning the Powerball lottery were about 1 one in 175 million, Matheson says. Now, the odds are 1 in 292.2 million.
“They’ve been playing Powerball, or the predecessor to it for [34 years], and they’ve gradually been making it harder and harder to win.” Matheson tells CNBC Make It.
How do lottery organizers increase the billion-dollar jackpots
The game isn’t just the one strategy organizers employ to boost the jackpots.
The nonprofit Multi-State Lottery Association (MUSL) manages a variety of lotteries that include Powerball is now directing more of its revenue from ticket sales to the jackpot, instead of smaller prizes, Matheson says — even though the smaller prizes have become more accessible to win.
MUSL has also steadily expanded Powerball’s footprint. The game now sells tickets across more than 45 U.S. states, including 14 new states since 2009.
The bulk of the expansion is derived from MUSL’s 2009 agreement with the state consortium who run the Mega Millions lottery. In the past, both lotteries were exclusively operated in separate states and the agreement opened the way for larger prize pools for 파워볼사이트 and Mega Millions.
Mega Millions followed Powerball’s path in 2017, increasing ticket prices as well as expanding the number combinations of numbers to increase jackpot size. Mega Millions has also seen its odds increase due to this: Your current odds of having a chance to win are 302.6 million, which is down from 1 in 259 million.
In recent times, the rising rates of interest are also helping lottery operators offer bigger jackpots.
The amount of the jackpot advertised by a lottery is based on the amount a winner could get if they choose to receive an annuity over a period for 30 years. A higher interest rate during the drawing mean a greater total payout from that annuity fund, as MUSL’s website points out.
In contrast, a lottery’s lump-sum cash payout is directly supported through ticket sales. The lump sum for the current Powerball prize is $782.4 million. This will lead to an annuity plan that eventually pays $1.6 billion over three decades according to the current interest rates.
Earlier this week in the week when the Powerball jackpot stood at $1.2 billion, and the option to buy a lump sum of $600 million, Matheson pointed out there was “same worth of money, as if playing at the lowest interest rate in the Covid recession in 2020, might have bought only $800 million in worth of value when it was advertised back in the day.”
The jackpots will continue to grow — and what do they mean to you?
Today’s lottery players have found the perfect spot for their games by “having an odds that are roughly similar to the population being served,” Matheson says. The odds for Powerball are 1 in 292 million, and the combined population in the states that sell tickets is nearly the same number of people.
The result is a game that produces eye-popping jackpot numbers but is only won “frequently enough that we don’t get discouraged,” Matheson says. “Because the lottery is about selling optimism.”
Also, organizers shouldn’t have a reason to continue making lotteries harder to win, unless jackpot sizes continue to grow too. The bigger jackpots will likely mean higher ticket prices or expansions to more states, and there are only 5 U.S. states don’t already offer Powerball and Mega Millions tickets.
Their combined population is relatively modest, at around 13.5 million .
The good news for lottery players can be found in the fact that after MUSL changed its format to make jackpots harder to collect It also made smaller prizes more accessible to win in order to reduce the anger of people not taking home millions, Matheson says.
But getting a $4 payout on a lottery ticket worth $2 isn’t the most attractive jackpot, which is why lottery companies are willing shift more of their earnings towards larger jackpots.
“That’s the reason every person plays this game to win big,” Matheson says. “You’re not writing any stories about the person who won $4.”
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