If you feel like you’re seeing increasing lottery winnings surpassing that $1-billion mark you’re 100% correct.
The jackpot for Saturday’s Powerball drawing has surged to $1.6 billion, which is the highest ever. It’s also the second billion-dollar jackpot for 2022, following the fact that there were no winners of the top prize in Wednesday’s draw. It’s the fifth time a U.S. lottery prize has hit 10 numbers since 2016, when the initial billion-dollar prize jackpot was announced.
The increase in popularity is through design, according to experts as well. The odds of actually winning a big jackpot are higher than ever.
Imagine this: If there is no one who takes home a prize in a lottery draw, the money won will roll over to the next draw which increases the amount of money in the pot. It makes the lottery more difficult to win and you’ll be able to almost guarantee higher jackpots on a regular basis and encourage more people to buy lottery tickets.
Powerball’s organizers have gradually made their lottery harder to win for decades according to Victor Matheson, an economics professor at the College of the Holy Cross who studies lotteries.
The most significant change occurred in 2015 where the lottery added additional numbers to almost halve the odds of hitting the jackpot. Prior to 2015, the odds of winning the 파워볼사이트 lottery were about 1 for 175 million Matheson states. Now, the odds are one in 292.2 million.
“They’ve been playing Powerball and its precursor for the past [34 years], and they’ve gradually made it more difficult and harder to win.” Matheson tells CNBC Make It.
How lottery organizers grow the billion-dollar jackpots
Making the game harder isn’t the only method organizers employ to increase the jackpots.
The nonprofit Multi-State Lottery Association (MUSL) manages a variety of lotteries which includes Powerball and Powerball, has begun redirecting more of its earnings from ticket sales to the jackpot, instead of smaller jackpots, Matheson says — even though smaller jackpots have become more accessible to win.
MUSL has also seen a steady expansion of Powerball’s footprint. Powerball tickets are now available across forty-five 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 that run Mega Millions. Mega Millions lottery. Previously, the two lotteries were only available in states that had separate lottery systems and the agreement set the way to bigger prizes for Powerball and Mega Millions.
Mega Millions followed Powerball’s path in 2017, increasing the cost of tickets and expanding the number combinations of numbers to increase the size of jackpots. Mega Millions’ odds have also increased due to this: Your current odds of having a chance to win are 302.6 million, which is down from 1 in 259 million.
More recently, rising rates of interest are helping lottery operators to offer larger jackpots.
The jackpot amount advertised for a lottery is based on the amount a winner would be awarded if they opt to be paid out in an annuity for a period that spans 30 years. An increase in interest rates at the time of the draw means that there is a bigger overall payout from that annuity fund, according to the website of MUSL.
By contrast, a lottery’s lump-sum cash option is directly supported via ticket sale. The lump sum of the current Powerball jackpot is $782.4 million. This will lead to an annuity plan that ultimately pays out $1.6 billion over the course of three years depending on current interest rates.
The week before at the time that the Powerball jackpot stood at $1.2 billion, with an option for a lump sum of almost $600 million. Matheson noted his observation that “same price in cash, but if playing at the lowest rates of interest during the Covid recession in 2020, could have been only $800 million worth of valued at the time of its announcement.”
Will jackpots keep getting bigger and what does that mean for you?
Today’s lottery companies have found the sweet spot “having an odds that are roughly equal to the population being served,” Matheson says. The Powerball odds are 1 in 292 million. The combined population in the states which tickets are sold is more than 3 million.
The result is a game that has eye-catching jackpot numbers even though it is won “frequently enough that we don’t be discouraged from winning,” Matheson says. “Because the lottery is all about selling hope.”
Also, organizers shouldn’t need a reason to keep making lotteries more difficult to be a winner, unless jackpots increase. Bigger jackpots would probably involve increased 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 tiny, with a total of 13.5 million .
The positive news for those who play the lottery is that when MUSL modified its structure so that jackpots were more difficult to be won and also make smaller prizes much easier to win to help to temper people’s disappointment at losing out on millions of dollars, Matheson says.
The reality is that a cash payout of $4 on a lottery ticket worth $2 isn’t exactly the most appealing jackpot, which is why lottery officials are willing to shift more of their earnings toward bigger jackpots.
”[That] is why everyone plays , to be a part of those huge jackpots,” Matheson says. “You’re not writing stories about the person who won $4.”
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