How Powerball manipulated the odds to make another massive jackpot

Bangor Daily News – by Alex Horton, Washington Post

At $700 million, Wednesday night’s Powerball prize is the second-largest lottery jackpot in its history, and the math is working out in favor of lotto commissions.

Two years ago, your chances of becoming an instant millionaire were 1 in roughly 175 million. Now, the odds are 1 in roughly 292 million.

Tweaks to the game in October 2015 increased the number of total balls, from 59 to 69, from which players need to pick five. It may seem like a modest change, but the odds of winning the jackpot shot up astronomically.  

So now it’s even harder to strike it rich with Powerball, leading to fewer chances of big payouts, which in turn rolls over to gigantic prizes such as the one Wednesday night.

Then you won’t believe what happens next. Media reports (like this one) and social-media posts fuel an ever-increasing prize, Kelly Tabor, a spokeswoman for the Colorado Lottery, told The Washington Post.

That is how the $1.6 billion amount paid out three ways in January 2016 reached its historic value.

The final figure of $700 million will probably balloon by Wednesday morning because of what Tabor called “jackpot chasers,” the casual lottery players who join in when the Powerball reaches astronomical heights.

“That’s really driving up sales right now,” she said.

The pot has been growing since June after the twice-weekly drawings netted no winners.

And if no one claims the winning ticket Wednesday, Tabor said, the next jackpot will probably surpass the $1.6 billion prize as the biggest ever.

States, not necessarily players, are reaping the rewards of the sales surge. National lottery ticket sales in 2016 totaled more than $80 billion, according to figures from the North American Association of State and Provincial Lotteries cited by the Associated Press. That’s more than was spent last year on movies, video games, books, music and sports tickets combined, the AP said.

Last year’s total was a $7 billion increase from 2015 revenue, which grew $3 billion compared with 2014 after two years of flat sales.

In other words: The rule change reaped big rewards for states and makes it harder for players to win big.

Lottery ticket sales, defended by state commissions as a way to help fund education and veterans programs, have drawn fire in recent years. HBO’s John Oliver delivered a scathing segment in 2014 questioning the potential harm for addiction and some dubious claims of how much revenue actually reaches state programs.

When it comes to modest numbers, the recent rule changes technically make it easier to win a prize because of a reduced number of red balls, known as the Powerball. Players in Colorado have a 1-in-38 chance to win the smallest amount, which is $4 – double the cost of a standard ticket, Tabor said.

The state has seen an uptick in the number of $50,000 and $100,000 prize winners since the rule change, she said.

“That was the feedback from players. They wanted a better shot at smaller prizes,” Tabor said.

Winners will typically opt for a lump sum instead of yearly payments spread across 29 years, Tabor said. That value for this week’s payout is estimated to be about $443 million, depending on state taxes.

New York, which has a relatively high state tax rate, sold the highest number of tickets in 2015. Tabor has some advice for some would-be winners there.

“If you’re playing Powerball, go over to Connecticut,” she said.

Note: Red shading denotes higher odds. California follows separate rules and, therefore, has different payouts.

Bangor Daily News