Why Powerball, Mega Thousands and thousands jackpots aren’t enormous
A customer shows purchased tickets for the Powerball lottery at a lottery shop in San Bernardino County, Calif., Jan. 9, 2016.
Gene Blevins | Reuters
If you’re one of those people who only buys a lottery ticket when the jackpot hits the stratosphere, you can wait a while.
The Mega Millions jackpot for Tuesday’s drawing is $ 86 million, and Powerball’s grand prize is $ 91 million for Wednesday’s drawing. While these would be life-changing fortunes for most winners, the amounts pale compared to what some have claimed in the past – including two worth more than $ 1.5 billion, one each in 2016 and 2018.
After pandemic orders and shutdowns at home earlier this year, those responsible for both games announced in early April that jackpots would no longer start at $ 40 million and there would be no minimum increase between draws ($ 5 million). Mega Millions and $ 10 million Powerball) when there was no top winner.
While these changes were made after the pandemic hit the U.S. economy, ticket sales for both games had already slowed before the $ 1.5 billion jackpot for Mega Millions was won in October 2018, Gordon Medenica said, executive director of the Mega Millions consortium and lottery director of Maryland.
Ticked sales “fell 40% in the year after that jackpot, even before the pandemic,” Medenica said. “Sales have fallen another 10% this year, which we attribute to the general ‘jackpot fatigue’.”
He also said that the games generally don’t get the media coverage and advertising that they once did.
Powerball sales have recovered from March, but are still around 20% below pre-pandemic levels, according to the Powerball product group.
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So far this year, five tickets have hit $ 881 million worth of Mega Million jackpots, including one for $ 414 million in June, which had grown since February. Seven were won in 2019, valued at more than $ 2 billion. And in 2018, the total value of the five jackpots was $ 3.2 billion.
Powerball won seven jackpots totaling $ 1 billion this year – including $ 396.9 million in late January, which were renewed since November 2019 – compared to seven worth 1.7 in 2019 Billion US dollars and nine in 2018 worth 3.5 billion US dollars.
The higher a jackpot goes, the more tickets are generally sold. According to a study by the personal finance site ValuePenguin, revenue grew 72% from 2012 to 2018 when the Mega Millions jackpot hit $ 350 million, and 294% when it hit $ 550 million. Research showed similar results for Powerball sales.
With slower sales and amounts that grow more slowly and then roll back to, say, $ 20 million, it can take a while for a jackpot to get onto the top 10 biggest prizes list.
Possible changes to at least one of the games are analyzed in order to arouse renewed enthusiasm.
“The Mega Millions Consortium is in intense internal discussions about future strategies, directions and game designs,” said Medenica.
Powerball officials said they had no immediate plans to return to minimal jackpots or raises.
“The strategy of using game sales and interest rates to determine the Powerball jackpot has enabled the Powerball family of products to make their jackpot decisions more quickly,” the organization said.
The Mega Millions Consortium is in intense internal discussions about future strategy, direction and game design.
Executive Director of the Mega Millions Consortium
Regardless of the size of the jackpot, the chance of hitting the Mega Millions jackpot with a single ticket is tiny: 1 in 302 million. For Powerball, the odds of winning the grand prize are slightly better: 1 in 292 million.
By comparison, your chance of being struck by lightning in your life is 1 in 15,300, according to the National Weather Service.
If you actually beat the jackpot odds of winning, experts generally recommend signing the back of your ticket and taking a deep breath before taking any action. Whether it’s $ 1 million or more than $ 100 million, you would likely owe federal taxes in excess of the 24% withheld, as well as state taxes, so plan accordingly. And there is a risk that a bonanza could be mistreated without guidance.
Experts recommend creating a team of professionals who have experience helping individuals tackle big problems. This should include a lawyer, accountant, and financial advisor.